Correlation Between Cullinan Oncology and Rallybio Corp

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

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

Diversification Opportunities for Cullinan Oncology and Rallybio Corp

0.25

Correlation Coefficient

Cullinan Oncology  Rallybio Corp

Modest diversification

The 3 months correlation between Cullinan and Rallybio is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cullinan Oncology LLC and Rallybio Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rallybio Corp and Cullinan Oncology 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 Cullinan Oncology LLC are associated (or correlated) with Rallybio Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rallybio Corp has no effect on the direction of Cullinan Oncology i.e., Cullinan Oncology and Rallybio Corp go up and down completely randomly.

Pair Corralation between Cullinan Oncology and Rallybio Corp

Given the investment horizon of 90 days Cullinan Oncology LLC is expected to under-perform the Rallybio Corp. But the stock apears to be less risky and, when comparing its historical volatility, Cullinan Oncology LLC is 1.19 times less risky than Rallybio Corp. The stock trades about -0.42 of its potential returns per unit of risk. The Rallybio Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Rallybio Corp on September 12, 2024 and sell it today you would earn a total of  15.50  from holding Rallybio Corp or generate 14.76% return on investment over 90 days.

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

Cullinan Oncology LLC  vs.  Rallybio Corp

Cullinan Oncology LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rallybio Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rallybio Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Rallybio Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cullinan Oncology and Rallybio Corp

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

The idea behind Cullinan Oncology LLC and Rallybio Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.