Correlation Between Ambrx Biopharma and Windtree Therapeutics

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

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

Diversification Opportunities for Ambrx Biopharma and Windtree Therapeutics

-0.62

Correlation Coefficient

Ambrx Biopharma  Windtree Therapeutics

Excellent diversification

The 3 months correlation between Ambrx and Windtree is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ambrx Biopharma American and Windtree Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windtree Therapeutics and Ambrx 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 Ambrx Biopharma American are associated (or correlated) with Windtree Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windtree Therapeutics has no effect on the direction of Ambrx Biopharma i.e., Ambrx Biopharma and Windtree Therapeutics go up and down completely randomly.

Pair Corralation between Ambrx Biopharma and Windtree Therapeutics

Given the investment horizon of 90 days Ambrx Biopharma American is expected to generate 1.06 times more return on investment than Windtree Therapeutics. However, Ambrx Biopharma is 1.06 times more volatile than Windtree Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Windtree Therapeutics is currently generating about -0.06 per unit of risk. If you would invest  212.00  in Ambrx Biopharma American on September 30, 2024 and sell it today you would earn a total of  1,361  from holding Ambrx Biopharma American or generate 641.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	27.36%
Values	Daily Returns

Ambrx Biopharma American  vs.  Windtree Therapeutics

Ambrx Biopharma American

Risk-Adjusted Performance

0 of 100

Very Weak

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

Windtree Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Windtree Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ambrx Biopharma and Windtree Therapeutics

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

The idea behind Ambrx Biopharma American and Windtree 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.