Correlation Between Passage Bio and Third Harmonic

Can any of the company-specific risk be diversified away by investing in both Passage Bio and Third Harmonic 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 Passage Bio and Third Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Passage Bio and Third Harmonic Bio, you can compare the effects of market volatilities on Passage Bio and Third Harmonic 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 Passage Bio with a short position of Third Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passage Bio and Third Harmonic.

Diversification Opportunities for Passage Bio and Third Harmonic

0.0

Correlation Coefficient

Passage Bio  Third Harmonic

Pay attention - limited upside

The 3 months correlation between Passage and Third is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and Third Harmonic Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Harmonic Bio and Passage Bio 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 Passage Bio are associated (or correlated) with Third Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Harmonic Bio has no effect on the direction of Passage Bio i.e., Passage Bio and Third Harmonic go up and down completely randomly.

Pair Corralation between Passage Bio and Third Harmonic

Given the investment horizon of 90 days Passage Bio is expected to generate 4.36 times less return on investment than Third Harmonic. In addition to that, Passage Bio is 18.16 times more volatile than Third Harmonic Bio. It trades about 0.0 of its total potential returns per unit of risk. Third Harmonic Bio is currently generating about 0.14 per unit of volatility. If you would invest  516.00  in Third Harmonic Bio on May 4, 2025 and sell it today you would earn a total of  22.00  from holding Third Harmonic Bio or generate 4.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Passage Bio  vs.  Third Harmonic Bio

Passage Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Passage Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Passage Bio is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Third Harmonic Bio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Third Harmonic Bio are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Third Harmonic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Passage Bio and Third Harmonic

The main advantage of trading using opposite Passage Bio and Third Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Passage Bio position performs unexpectedly, Third Harmonic 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 Third Harmonic will offset losses from the drop in Third Harmonic's long position.

The idea behind Passage Bio and Third Harmonic Bio 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.