Correlation Between Solid Biosciences and Uniqure NV

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

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

Diversification Opportunities for Solid Biosciences and Uniqure NV

-0.53

Correlation Coefficient

Solid Biosciences  Uniqure NV

Excellent diversification

The 3 months correlation between Solid and Uniqure is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Solid Biosciences LLC and Uniqure NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniqure NV and Solid Biosciences 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 Solid Biosciences LLC are associated (or correlated) with Uniqure NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniqure NV has no effect on the direction of Solid Biosciences i.e., Solid Biosciences and Uniqure NV go up and down completely randomly.

Pair Corralation between Solid Biosciences and Uniqure NV

Given the investment horizon of 90 days Solid Biosciences LLC is expected to under-perform the Uniqure NV. But the stock apears to be less risky and, when comparing its historical volatility, Solid Biosciences LLC is 1.27 times less risky than Uniqure NV. The stock trades about -0.11 of its potential returns per unit of risk. The Uniqure NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  557.00  in Uniqure NV on September 3, 2024 and sell it today you would earn a total of  40.00  from holding Uniqure NV or generate 7.18% return on investment over 90 days.

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

Solid Biosciences LLC  vs.  Uniqure NV

Solid Biosciences LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solid Biosciences LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental 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.

Uniqure NV

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uniqure NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Uniqure NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solid Biosciences and Uniqure NV

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

The idea behind Solid Biosciences LLC and Uniqure NV 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.