Correlation Between Capricor Therapeutics and Fate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Capricor Therapeutics and Fate 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 Capricor Therapeutics and Fate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricor Therapeutics and Fate Therapeutics, you can compare the effects of market volatilities on Capricor Therapeutics and Fate 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 Capricor Therapeutics with a short position of Fate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricor Therapeutics and Fate Therapeutics.
Diversification Opportunities for Capricor Therapeutics and Fate Therapeutics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capricor and Fate is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Capricor Therapeutics and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics and Capricor 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 Capricor Therapeutics are associated (or correlated) with Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Capricor Therapeutics i.e., Capricor Therapeutics and Fate Therapeutics go up and down completely randomly.
Pair Corralation between Capricor Therapeutics and Fate Therapeutics
Given the investment horizon of 90 days Capricor Therapeutics is expected to generate 1.49 times more return on investment than Fate Therapeutics. However, Capricor Therapeutics is 1.49 times more volatile than Fate Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 1,034 in Capricor Therapeutics on September 25, 2024 and sell it today you would earn a total of 369.00 from holding Capricor Therapeutics or generate 35.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Capricor Therapeutics vs. Fate Therapeutics
Performance |
Timeline |
Capricor Therapeutics |
Fate Therapeutics |
Capricor Therapeutics and Fate Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capricor Therapeutics and Fate Therapeutics
The main advantage of trading using opposite Capricor Therapeutics and Fate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricor Therapeutics position performs unexpectedly, Fate 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 Fate Therapeutics will offset losses from the drop in Fate Therapeutics' long position.Capricor Therapeutics vs. Fate Therapeutics | Capricor Therapeutics vs. Caribou Biosciences | Capricor Therapeutics vs. Karyopharm Therapeutics | Capricor Therapeutics vs. X4 Pharmaceuticals |
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Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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