Correlation Between Curis and Fresh Tracks

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

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

Diversification Opportunities for Curis and Fresh Tracks

-0.61

Correlation Coefficient

Curis  Fresh Tracks

Excellent diversification

The 3 months correlation between Curis and Fresh is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Curis Inc and Fresh Tracks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Tracks Therapeutics and Curis 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 Curis Inc are associated (or correlated) with Fresh Tracks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Tracks Therapeutics has no effect on the direction of Curis i.e., Curis and Fresh Tracks go up and down completely randomly.

Pair Corralation between Curis and Fresh Tracks

Given the investment horizon of 90 days Curis Inc is expected to under-perform the Fresh Tracks. But the stock apears to be less risky and, when comparing its historical volatility, Curis Inc is 1.84 times less risky than Fresh Tracks. The stock trades about -0.03 of its potential returns per unit of risk. The Fresh Tracks Therapeutics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  59.00  in Fresh Tracks Therapeutics on August 31, 2024 and sell it today you would earn a total of  19.00  from holding Fresh Tracks Therapeutics or generate 32.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	8.56%
Values	Daily Returns

Curis Inc  vs.  Fresh Tracks Therapeutics

Curis Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curis Inc 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 forward indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fresh Tracks Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Tracks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fresh Tracks is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Curis and Fresh Tracks

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

The idea behind Curis Inc and Fresh Tracks 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..