Correlation Between Eterna Therapeutics and Mural Oncology

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

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

Diversification Opportunities for Eterna Therapeutics and Mural Oncology

-0.68

Correlation Coefficient

Eterna Therapeutics  Mural Oncology

Excellent diversification

The 3 months correlation between Eterna and Mural is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eterna Therapeutics and Mural Oncology plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mural Oncology plc and Eterna 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 Eterna Therapeutics are associated (or correlated) with Mural Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mural Oncology plc has no effect on the direction of Eterna Therapeutics i.e., Eterna Therapeutics and Mural Oncology go up and down completely randomly.

Pair Corralation between Eterna Therapeutics and Mural Oncology

Given the investment horizon of 90 days Eterna Therapeutics is expected to under-perform the Mural Oncology. In addition to that, Eterna Therapeutics is 1.38 times more volatile than Mural Oncology plc. It trades about -0.05 of its total potential returns per unit of risk. Mural Oncology plc is currently generating about 0.01 per unit of volatility. If you would invest  380.00  in Mural Oncology plc on September 18, 2024 and sell it today you would lose (36.00) from holding Mural Oncology plc or give up 9.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	54.95%
Values	Daily Returns

Eterna Therapeutics  vs.  Mural Oncology plc

Eterna Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eterna Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Mural Oncology plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mural Oncology plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mural Oncology is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eterna Therapeutics and Mural Oncology

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

The idea behind Eterna Therapeutics and Mural Oncology plc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.