Correlation Between Ginkgo Bioworks and Freeline Therapeutics

Can any of the company-specific risk be diversified away by investing in both Ginkgo Bioworks and Freeline 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 Ginkgo Bioworks and Freeline Therapeutics 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 Freeline Therapeutics Holdings, you can compare the effects of market volatilities on Ginkgo Bioworks and Freeline 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 Ginkgo Bioworks with a short position of Freeline Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ginkgo Bioworks and Freeline Therapeutics.

Diversification Opportunities for Ginkgo Bioworks and Freeline Therapeutics

0.06

Correlation Coefficient

Ginkgo Bioworks  Freeline Therapeutics

Significant diversification

The 3 months correlation between Ginkgo and Freeline is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Freeline Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeline Therapeutics 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 Freeline Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeline Therapeutics has no effect on the direction of Ginkgo Bioworks i.e., Ginkgo Bioworks and Freeline Therapeutics go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Freeline Therapeutics

If you would invest  431.00  in Freeline Therapeutics Holdings on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Freeline Therapeutics Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.8%
Values	Daily Returns

Ginkgo Bioworks Holdings  vs.  Freeline Therapeutics Holdings

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ginkgo Bioworks Holdings are ranked lower than 5 (%) 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.

Freeline Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freeline Therapeutics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Freeline Therapeutics 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 Freeline Therapeutics

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

The idea behind Ginkgo Bioworks Holdings and Freeline Therapeutics Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.