Correlation Between Fate Therapeutics and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and Abcellera Biologics 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 Fate Therapeutics and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Abcellera Biologics, you can compare the effects of market volatilities on Fate Therapeutics and Abcellera Biologics 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 Fate Therapeutics with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Abcellera Biologics.
Diversification Opportunities for Fate Therapeutics and Abcellera Biologics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fate and Abcellera is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Fate Therapeutics 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 Fate Therapeutics are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Abcellera Biologics
Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the Abcellera Biologics. In addition to that, Fate Therapeutics is 1.85 times more volatile than Abcellera Biologics. It trades about -0.14 of its total potential returns per unit of risk. Abcellera Biologics is currently generating about 0.03 per unit of volatility. If you would invest 278.00 in Abcellera Biologics on September 23, 2024 and sell it today you would earn a total of 7.00 from holding Abcellera Biologics or generate 2.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fate Therapeutics vs. Abcellera Biologics
Performance |
Timeline |
Fate Therapeutics |
Abcellera Biologics |
Fate Therapeutics and Abcellera Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fate Therapeutics and Abcellera Biologics
The main advantage of trading using opposite Fate Therapeutics and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
Abcellera Biologics vs. Fate Therapeutics | Abcellera Biologics vs. Sana Biotechnology | Abcellera Biologics vs. Caribou Biosciences | Abcellera Biologics vs. Arcus Biosciences |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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