Correlation Between ATyr Pharma and G1 Therapeutics

Can any of the company-specific risk be diversified away by investing in both ATyr Pharma and G1 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 ATyr Pharma and G1 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATyr Pharma and G1 Therapeutics, you can compare the effects of market volatilities on ATyr Pharma and G1 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 ATyr Pharma with a short position of G1 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATyr Pharma and G1 Therapeutics.

Diversification Opportunities for ATyr Pharma and G1 Therapeutics

-0.2

Correlation Coefficient

ATyr Pharma  G1 Therapeutics

Good diversification

The 3 months correlation between ATyr and GTHX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ATyr Pharma and G1 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G1 Therapeutics and ATyr Pharma 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 ATyr Pharma are associated (or correlated) with G1 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G1 Therapeutics has no effect on the direction of ATyr Pharma i.e., ATyr Pharma and G1 Therapeutics go up and down completely randomly.

Pair Corralation between ATyr Pharma and G1 Therapeutics

If you would invest  715.00  in G1 Therapeutics on September 5, 2024 and sell it today you would earn a total of  0.00  from holding G1 Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ATyr Pharma  vs.  G1 Therapeutics

ATyr Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATyr Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ATyr Pharma is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

G1 Therapeutics

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days G1 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, G1 Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATyr Pharma and G1 Therapeutics

The main advantage of trading using opposite ATyr Pharma and G1 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATyr Pharma position performs unexpectedly, G1 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 G1 Therapeutics will offset losses from the drop in G1 Therapeutics' long position.

The idea behind ATyr Pharma and G1 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.