Correlation Between Scpharmaceuticals and Armata Pharmaceuticals

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

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

Diversification Opportunities for Scpharmaceuticals and Armata Pharmaceuticals

0.07

Correlation Coefficient

Scpharmaceuticals  Armata Pharmaceuticals

Significant diversification

The 3 months correlation between Scpharmaceuticals and Armata is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Scpharmaceuticals and Armata Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armata Pharmaceuticals and Scpharmaceuticals 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 Scpharmaceuticals are associated (or correlated) with Armata Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armata Pharmaceuticals has no effect on the direction of Scpharmaceuticals i.e., Scpharmaceuticals and Armata Pharmaceuticals go up and down completely randomly.

Pair Corralation between Scpharmaceuticals and Armata Pharmaceuticals

Given the investment horizon of 90 days Scpharmaceuticals is expected to under-perform the Armata Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Scpharmaceuticals is 1.22 times less risky than Armata Pharmaceuticals. The stock trades about -0.2 of its potential returns per unit of risk. The Armata Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  218.00  in Armata Pharmaceuticals on September 16, 2024 and sell it today you would earn a total of  1.00  from holding Armata Pharmaceuticals or generate 0.46% return on investment over 90 days.

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

Scpharmaceuticals  vs.  Armata Pharmaceuticals

Scpharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scpharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Armata Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Armata Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal primary indicators, Armata Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Scpharmaceuticals and Armata Pharmaceuticals

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

The idea behind Scpharmaceuticals and Armata 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.