Correlation Between Structure Therapeutics and Sutro Biopharma

Can any of the company-specific risk be diversified away by investing in both Structure Therapeutics and Sutro Biopharma at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Structure Therapeutics and Sutro Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Structure Therapeutics American and Sutro Biopharma, you can compare the effects of market volatilities on Structure Therapeutics and Sutro Biopharma and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Structure Therapeutics with a short position of Sutro Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Structure Therapeutics and Sutro Biopharma.

Diversification Opportunities for Structure Therapeutics and Sutro Biopharma

0.31

Correlation Coefficient

Structure Therapeutics  Sutro Biopharma

Weak diversification

The 3 months correlation between Structure and Sutro is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Structure Therapeutics America and Sutro Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sutro Biopharma and Structure Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Structure Therapeutics American are associated (or correlated) with Sutro Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sutro Biopharma has no effect on the direction of Structure Therapeutics i.e., Structure Therapeutics and Sutro Biopharma go up and down completely randomly.

Pair Corralation between Structure Therapeutics and Sutro Biopharma

Given the investment horizon of 90 days Structure Therapeutics American is expected to under-perform the Sutro Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Structure Therapeutics American is 1.37 times less risky than Sutro Biopharma. The stock trades about -0.11 of its potential returns per unit of risk. The Sutro Biopharma is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Sutro Biopharma on May 27, 2025 and sell it today you would lose (10.00) from holding Sutro Biopharma or give up 10.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Structure Therapeutics America  vs.  Sutro Biopharma

Structure Therapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Structure Therapeutics American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sutro Biopharma

Risk-Adjusted Performance

Weakest

Over the last 90 days Sutro Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sutro Biopharma is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Structure Therapeutics and Sutro Biopharma

The main advantage of trading using opposite Structure Therapeutics and Sutro Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Structure Therapeutics position performs unexpectedly, Sutro Biopharma can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sutro Biopharma will offset losses from the drop in Sutro Biopharma's long position.

The idea behind Structure Therapeutics American and Sutro Biopharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.