Correlation Between Monopar Therapeutics and Instil Bio

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

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

Diversification Opportunities for Monopar Therapeutics and Instil Bio

-0.75

Correlation Coefficient

Monopar Therapeutics  Instil Bio

Pay attention - limited upside

The 3 months correlation between Monopar and Instil is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Monopar Therapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Monopar 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 Monopar Therapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Monopar Therapeutics i.e., Monopar Therapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between Monopar Therapeutics and Instil Bio

Given the investment horizon of 90 days Monopar Therapeutics is expected to generate 10.65 times more return on investment than Instil Bio. However, Monopar Therapeutics is 10.65 times more volatile than Instil Bio. It trades about 0.13 of its potential returns per unit of risk. Instil Bio is currently generating about -0.2 per unit of risk. If you would invest  416.00  in Monopar Therapeutics on September 17, 2024 and sell it today you would earn a total of  2,122  from holding Monopar Therapeutics or generate 510.1% return on investment over 90 days.

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

Monopar Therapeutics  vs.  Instil Bio

Monopar Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monopar Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Monopar Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Instil Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Instil Bio 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 forward indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Monopar Therapeutics and Instil Bio

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

The idea behind Monopar Therapeutics and Instil Bio 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.