Correlation Between Caribou Biosciences and Biomx

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

By analyzing existing cross correlation between Caribou Biosciences and Biomx Inc, you can compare the effects of market volatilities on Caribou Biosciences and Biomx 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 Caribou Biosciences with a short position of Biomx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribou Biosciences and Biomx.

Diversification Opportunities for Caribou Biosciences and Biomx

-0.2

Correlation Coefficient

Caribou Biosciences  Biomx

Good diversification

The 3 months correlation between Caribou and Biomx is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Biomx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomx Inc and Caribou Biosciences 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 Caribou Biosciences are associated (or correlated) with Biomx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomx Inc has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Biomx go up and down completely randomly.

Pair Corralation between Caribou Biosciences and Biomx

Given the investment horizon of 90 days Caribou Biosciences is expected to generate 0.87 times more return on investment than Biomx. However, Caribou Biosciences is 1.14 times less risky than Biomx. It trades about 0.01 of its potential returns per unit of risk. Biomx Inc is currently generating about -0.13 per unit of risk. If you would invest  190.00  in Caribou Biosciences on September 23, 2024 and sell it today you would lose (10.00) from holding Caribou Biosciences or give up 5.26% of portfolio value over 90 days.

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

Caribou Biosciences  vs.  Biomx Inc

Caribou Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caribou Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Caribou Biosciences is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Biomx Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Caribou Biosciences and Biomx

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

The idea behind Caribou Biosciences and Biomx Inc 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.