Correlation Between Zura Bio and Tscan Therapeutics

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

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

Diversification Opportunities for Zura Bio and Tscan Therapeutics

0.71

Correlation Coefficient

Zura Bio  Tscan Therapeutics

Poor diversification

The 3 months correlation between Zura and Tscan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zura Bio Limited and Tscan Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tscan Therapeutics and Zura 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 Zura Bio Limited are associated (or correlated) with Tscan Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tscan Therapeutics has no effect on the direction of Zura Bio i.e., Zura Bio and Tscan Therapeutics go up and down completely randomly.

Pair Corralation between Zura Bio and Tscan Therapeutics

Given the investment horizon of 90 days Zura Bio Limited is expected to generate 1.41 times more return on investment than Tscan Therapeutics. However, Zura Bio is 1.41 times more volatile than Tscan Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Tscan Therapeutics is currently generating about 0.05 per unit of risk. If you would invest  144.00  in Zura Bio Limited on May 5, 2025 and sell it today you would earn a total of  6.00  from holding Zura Bio Limited or generate 4.17% return on investment over 90 days.

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

Zura Bio Limited  vs.  Tscan Therapeutics

Zura Bio Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zura Bio Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zura Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Tscan Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tscan Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Tscan Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zura Bio and Tscan Therapeutics

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

The idea behind Zura Bio Limited and Tscan Therapeutics 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.