Correlation Between Milestone Pharmaceuticals and Ginkgo Bioworks

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

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

Diversification Opportunities for Milestone Pharmaceuticals and Ginkgo Bioworks

-0.24

Correlation Coefficient

Milestone Pharmaceuticals  Ginkgo Bioworks

Very good diversification

The 3 months correlation between Milestone and Ginkgo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Milestone Pharmaceuticals and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings and Milestone Pharmaceuticals 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 Milestone Pharmaceuticals are associated (or correlated) with Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of Milestone Pharmaceuticals i.e., Milestone Pharmaceuticals and Ginkgo Bioworks go up and down completely randomly.

Pair Corralation between Milestone Pharmaceuticals and Ginkgo Bioworks

Given the investment horizon of 90 days Milestone Pharmaceuticals is expected to generate 0.33 times more return on investment than Ginkgo Bioworks. However, Milestone Pharmaceuticals is 3.02 times less risky than Ginkgo Bioworks. It trades about 0.12 of its potential returns per unit of risk. Ginkgo Bioworks Holdings is currently generating about -0.05 per unit of risk. If you would invest  129.00  in Milestone Pharmaceuticals on June 25, 2024 and sell it today you would earn a total of  26.00  from holding Milestone Pharmaceuticals or generate 20.16% return on investment over 90 days.

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

Milestone Pharmaceuticals  vs.  Ginkgo Bioworks Holdings

Milestone Pharmaceuticals

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Milestone Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Milestone Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ginkgo Bioworks Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Milestone Pharmaceuticals and Ginkgo Bioworks

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

The idea behind Milestone Pharmaceuticals and Ginkgo Bioworks 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.