Correlation Between Ginkgo Bioworks and AVROBIO

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

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

Diversification Opportunities for Ginkgo Bioworks and AVROBIO

0.54

Correlation Coefficient

Ginkgo Bioworks  AVROBIO

Very weak diversification

The 3 months correlation between Ginkgo and AVROBIO is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and AVROBIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVROBIO and Ginkgo Bioworks 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 Ginkgo Bioworks Holdings are associated (or correlated) with AVROBIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVROBIO has no effect on the direction of Ginkgo Bioworks i.e., Ginkgo Bioworks and AVROBIO go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and AVROBIO

If you would invest  770.00  in Ginkgo Bioworks Holdings on September 26, 2024 and sell it today you would earn a total of  167.00  from holding Ginkgo Bioworks Holdings or generate 21.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Ginkgo Bioworks Holdings  vs.  AVROBIO

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ginkgo Bioworks Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Ginkgo Bioworks sustained solid returns over the last few months and may actually be approaching a breakup point.

AVROBIO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AVROBIO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, AVROBIO is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ginkgo Bioworks and AVROBIO

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

The idea behind Ginkgo Bioworks Holdings and AVROBIO 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.