Correlation Between Sutro Biopharma and Structure Therapeutics

Can any of the company-specific risk be diversified away by investing in both Sutro Biopharma and Structure Therapeutics 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 Sutro Biopharma and Structure Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sutro Biopharma and Structure Therapeutics American, you can compare the effects of market volatilities on Sutro Biopharma and Structure Therapeutics 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 Sutro Biopharma with a short position of Structure Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sutro Biopharma and Structure Therapeutics.

Diversification Opportunities for Sutro Biopharma and Structure Therapeutics

0.28

Correlation Coefficient

Sutro Biopharma  Structure Therapeutics

Modest diversification

The 3 months correlation between Sutro and Structure is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sutro Biopharma and Structure Therapeutics America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structure Therapeutics and Sutro Biopharma 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 Sutro Biopharma are associated (or correlated) with Structure Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structure Therapeutics has no effect on the direction of Sutro Biopharma i.e., Sutro Biopharma and Structure Therapeutics go up and down completely randomly.

Pair Corralation between Sutro Biopharma and Structure Therapeutics

Given the investment horizon of 90 days Sutro Biopharma is expected to generate 1.45 times more return on investment than Structure Therapeutics. However, Sutro Biopharma is 1.45 times more volatile than Structure Therapeutics American. It trades about -0.01 of its potential returns per unit of risk. Structure Therapeutics American is currently generating about -0.05 per unit of risk. If you would invest  92.00  in Sutro Biopharma on May 28, 2025 and sell it today you would lose (8.00) from holding Sutro Biopharma or give up 8.7% of portfolio value over 90 days.

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

Sutro Biopharma  vs.  Structure Therapeutics America

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.

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 latest unfluctuating performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Sutro Biopharma and Structure Therapeutics

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

The idea behind Sutro Biopharma and Structure Therapeutics American 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 Global Correlations module to find global opportunities by holding instruments from different markets.