Correlation Between Autolus Therapeutics and Olema Pharmaceuticals

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

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

Diversification Opportunities for Autolus Therapeutics and Olema Pharmaceuticals

0.62

Correlation Coefficient

Autolus Therapeutics  Olema Pharmaceuticals

Poor diversification

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

Pair Corralation between Autolus Therapeutics and Olema Pharmaceuticals

Given the investment horizon of 90 days Autolus Therapeutics is expected to generate 1.61 times less return on investment than Olema Pharmaceuticals. But when comparing it to its historical volatility, Autolus Therapeutics is 1.11 times less risky than Olema Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Olema Pharmaceuticals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  312.00  in Olema Pharmaceuticals on August 31, 2024 and sell it today you would earn a total of  701.00  from holding Olema Pharmaceuticals or generate 224.68% return on investment over 90 days.

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

Autolus Therapeutics  vs.  Olema Pharmaceuticals

Autolus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autolus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Olema Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Olema Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Olema Pharmaceuticals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Autolus Therapeutics and Olema Pharmaceuticals

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

The idea behind Autolus Therapeutics and Olema Pharmaceuticals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.