Correlation Between MeiraGTx Holdings and Atea PharmaceuticalsI

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

By analyzing existing cross correlation between MeiraGTx Holdings PLC and Atea PharmaceuticalsInc, you can compare the effects of market volatilities on MeiraGTx Holdings and Atea PharmaceuticalsI 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 MeiraGTx Holdings with a short position of Atea PharmaceuticalsI. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeiraGTx Holdings and Atea PharmaceuticalsI.

Diversification Opportunities for MeiraGTx Holdings and Atea PharmaceuticalsI

0.46

Correlation Coefficient

MeiraGTx Holdings  Atea PharmaceuticalsI

Very weak diversification

The 3 months correlation between MeiraGTx and Atea is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MeiraGTx Holdings PLC and Atea PharmaceuticalsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea PharmaceuticalsInc and MeiraGTx Holdings 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 MeiraGTx Holdings PLC are associated (or correlated) with Atea PharmaceuticalsI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea PharmaceuticalsInc has no effect on the direction of MeiraGTx Holdings i.e., MeiraGTx Holdings and Atea PharmaceuticalsI go up and down completely randomly.

Pair Corralation between MeiraGTx Holdings and Atea PharmaceuticalsI

Given the investment horizon of 90 days MeiraGTx Holdings PLC is expected to under-perform the Atea PharmaceuticalsI. In addition to that, MeiraGTx Holdings is 1.24 times more volatile than Atea PharmaceuticalsInc. It trades about -0.01 of its total potential returns per unit of risk. Atea PharmaceuticalsInc is currently generating about 0.0 per unit of volatility. If you would invest  533.00  in Atea PharmaceuticalsInc on January 28, 2024 and sell it today you would lose (162.00) from holding Atea PharmaceuticalsInc or give up 30.39% of portfolio value over 90 days.

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

MeiraGTx Holdings PLC  vs.  Atea PharmaceuticalsInc

MeiraGTx Holdings PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MeiraGTx Holdings PLC 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 basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Atea PharmaceuticalsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atea PharmaceuticalsInc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Atea PharmaceuticalsI is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MeiraGTx Holdings and Atea PharmaceuticalsI

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

The idea behind MeiraGTx Holdings PLC and Atea PharmaceuticalsInc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.