Correlation Between Hookipa Pharma and Arcturus Therapeutics

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

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

Diversification Opportunities for Hookipa Pharma and Arcturus Therapeutics

-0.6

Correlation Coefficient

Hookipa Pharma  Arcturus Therapeutics

Excellent diversification

The 3 months correlation between Hookipa and Arcturus is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hookipa Pharma and Arcturus Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcturus Therapeutics and Hookipa Pharma 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 Hookipa Pharma are associated (or correlated) with Arcturus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcturus Therapeutics has no effect on the direction of Hookipa Pharma i.e., Hookipa Pharma and Arcturus Therapeutics go up and down completely randomly.

Pair Corralation between Hookipa Pharma and Arcturus Therapeutics

Given the investment horizon of 90 days Hookipa Pharma is expected to generate 1.23 times more return on investment than Arcturus Therapeutics. However, Hookipa Pharma is 1.23 times more volatile than Arcturus Therapeutics Holdings. It trades about 0.09 of its potential returns per unit of risk. Arcturus Therapeutics Holdings is currently generating about -0.06 per unit of risk. If you would invest  67.00  in Hookipa Pharma on February 20, 2024 and sell it today you would earn a total of  15.00  from holding Hookipa Pharma or generate 22.39% return on investment over 90 days.

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

Hookipa Pharma  vs.  Arcturus Therapeutics Holdings

Hookipa Pharma

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hookipa Pharma are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Hookipa Pharma disclosed solid returns over the last few months and may actually be approaching a breakup point.

Arcturus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcturus Therapeutics Holdings 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 June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hookipa Pharma and Arcturus Therapeutics

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

The idea behind Hookipa Pharma and Arcturus Therapeutics Holdings 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.