Correlation Between Akero Therapeutics and Ibio
Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and Ibio 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 Akero Therapeutics and Ibio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akero Therapeutics and Ibio Inc, you can compare the effects of market volatilities on Akero Therapeutics and Ibio 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 Akero Therapeutics with a short position of Ibio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and Ibio.
Diversification Opportunities for Akero Therapeutics and Ibio
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Akero and Ibio is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and Ibio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibio Inc and Akero 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 Akero Therapeutics are associated (or correlated) with Ibio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibio Inc has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and Ibio go up and down completely randomly.
Pair Corralation between Akero Therapeutics and Ibio
Given the investment horizon of 90 days Akero Therapeutics is expected to generate 46.74 times less return on investment than Ibio. But when comparing it to its historical volatility, Akero Therapeutics is 1.64 times less risky than Ibio. It trades about 0.0 of its potential returns per unit of risk. Ibio Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 195.00 in Ibio Inc on September 26, 2024 and sell it today you would earn a total of 47.00 from holding Ibio Inc or generate 24.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Akero Therapeutics vs. Ibio Inc
Performance |
Timeline |
Akero Therapeutics |
Ibio Inc |
Akero Therapeutics and Ibio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Akero Therapeutics and Ibio
The main advantage of trading using opposite Akero Therapeutics and Ibio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, Ibio 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 Ibio will offset losses from the drop in Ibio's long position.Akero Therapeutics vs. Fate Therapeutics | Akero Therapeutics vs. Caribou Biosciences | Akero Therapeutics vs. Karyopharm Therapeutics | Akero Therapeutics vs. X4 Pharmaceuticals |
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Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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