Correlation Between Caribou Biosciences and Ultragenyx

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

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

Diversification Opportunities for Caribou Biosciences and Ultragenyx

-0.04

Correlation Coefficient

Caribou Biosciences  Ultragenyx

Good diversification

The 3 months correlation between Caribou and Ultragenyx is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Ultragenyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultragenyx 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 Ultragenyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultragenyx has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Ultragenyx go up and down completely randomly.

Pair Corralation between Caribou Biosciences and Ultragenyx

Given the investment horizon of 90 days Caribou Biosciences is expected to generate 2.43 times more return on investment than Ultragenyx. However, Caribou Biosciences is 2.43 times more volatile than Ultragenyx. It trades about -0.02 of its potential returns per unit of risk. Ultragenyx is currently generating about -0.18 per unit of risk. If you would invest  196.00  in Caribou Biosciences on September 28, 2024 and sell it today you would lose (26.00) from holding Caribou Biosciences or give up 13.27% 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.  Ultragenyx

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 latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ultragenyx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultragenyx 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 basic 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 Ultragenyx

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

The idea behind Caribou Biosciences and Ultragenyx 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.