Correlation Between Amicus Therapeutics and BioatlaInc

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

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

Diversification Opportunities for Amicus Therapeutics and BioatlaInc

-0.27

Correlation Coefficient

Amicus Therapeutics  BioatlaInc

Very good diversification

The 3 months correlation between Amicus and BioatlaInc is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics and BioatlaInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioatlaInc and Amicus 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 Amicus Therapeutics are associated (or correlated) with BioatlaInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioatlaInc has no effect on the direction of Amicus Therapeutics i.e., Amicus Therapeutics and BioatlaInc go up and down completely randomly.

Pair Corralation between Amicus Therapeutics and BioatlaInc

Given the investment horizon of 90 days Amicus Therapeutics is expected to generate 0.39 times more return on investment than BioatlaInc. However, Amicus Therapeutics is 2.54 times less risky than BioatlaInc. It trades about 0.0 of its potential returns per unit of risk. BioatlaInc is currently generating about -0.03 per unit of risk. If you would invest  1,210  in Amicus Therapeutics on January 24, 2024 and sell it today you would lose (128.00) from holding Amicus Therapeutics or give up 10.58% of portfolio value over 90 days.

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

Amicus Therapeutics  vs.  BioatlaInc

Amicus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amicus 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 essential indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

BioatlaInc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioatlaInc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BioatlaInc sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amicus Therapeutics and BioatlaInc

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

The idea behind Amicus Therapeutics and BioatlaInc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.