Correlation Between Instil Bio and Oncternal Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Instil Bio and Oncternal 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 Instil Bio and Oncternal Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instil Bio and Oncternal Therapeutics, you can compare the effects of market volatilities on Instil Bio and Oncternal 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 Instil Bio with a short position of Oncternal Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instil Bio and Oncternal Therapeutics.

Diversification Opportunities for Instil Bio and Oncternal Therapeutics

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Instil and Oncternal is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Instil Bio and Oncternal Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncternal Therapeutics and Instil Bio 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 Instil Bio are associated (or correlated) with Oncternal Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncternal Therapeutics has no effect on the direction of Instil Bio i.e., Instil Bio and Oncternal Therapeutics go up and down completely randomly.

Pair Corralation between Instil Bio and Oncternal Therapeutics

Considering the 90-day investment horizon Instil Bio is expected to under-perform the Oncternal Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Instil Bio is 1.52 times less risky than Oncternal Therapeutics. The stock trades about -0.2 of its potential returns per unit of risk. The Oncternal Therapeutics is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  148.00  in Oncternal Therapeutics on September 17, 2024 and sell it today you would lose (95.00) from holding Oncternal Therapeutics or give up 64.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy87.5%
ValuesDaily Returns

Instil Bio  vs.  Oncternal Therapeutics

 Performance 
       Timeline  
Instil Bio 

Risk-Adjusted Performance

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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.
Oncternal Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oncternal Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Instil Bio and Oncternal Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Instil Bio and Oncternal Therapeutics

The main advantage of trading using opposite Instil Bio and Oncternal Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instil Bio position performs unexpectedly, Oncternal 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 Oncternal Therapeutics will offset losses from the drop in Oncternal Therapeutics' long position.
The idea behind Instil Bio and Oncternal 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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