Correlation Between Shattuck Labs and Instil Bio

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

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

Diversification Opportunities for Shattuck Labs and Instil Bio

0.45

Correlation Coefficient

Shattuck Labs  Instil Bio

Very weak diversification

The 3 months correlation between Shattuck and Instil is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shattuck Labs and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Shattuck Labs 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 Shattuck Labs 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 Shattuck Labs i.e., Shattuck Labs and Instil Bio go up and down completely randomly.

Pair Corralation between Shattuck Labs and Instil Bio

Given the investment horizon of 90 days Shattuck Labs is expected to generate 6.57 times less return on investment than Instil Bio. But when comparing it to its historical volatility, Shattuck Labs is 1.43 times less risky than Instil Bio. It trades about 0.0 of its potential returns per unit of risk. Instil Bio is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,763  in Instil Bio on September 5, 2024 and sell it today you would lose (84.00) from holding Instil Bio or give up 3.04% of portfolio value over 90 days.

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

Shattuck Labs  vs.  Instil Bio

Shattuck Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shattuck Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic 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.

Instil Bio

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shattuck Labs and Instil Bio

The main advantage of trading using opposite Shattuck Labs and Instil Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shattuck Labs 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 Shattuck Labs 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.