Correlation Between Fate Therapeutics and Abeona Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and Abeona 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 Fate Therapeutics and Abeona Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Abeona Therapeutics, you can compare the effects of market volatilities on Fate Therapeutics and Abeona 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 Fate Therapeutics with a short position of Abeona Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Abeona Therapeutics.

Diversification Opportunities for Fate Therapeutics and Abeona Therapeutics

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fate and Abeona is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics 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 Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between Fate Therapeutics and Abeona Therapeutics

Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the Abeona Therapeutics. In addition to that, Fate Therapeutics is 2.77 times more volatile than Abeona Therapeutics. It trades about -0.15 of its total potential returns per unit of risk. Abeona Therapeutics is currently generating about -0.01 per unit of volatility. If you would invest  586.00  in Abeona Therapeutics on September 22, 2024 and sell it today you would lose (16.00) from holding Abeona Therapeutics or give up 2.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Fate Therapeutics  vs.  Abeona Therapeutics

 Performance 
       Timeline  
Fate Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fate Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.
Abeona Therapeutics 

Risk-Adjusted Performance

0 of 100

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

Fate Therapeutics and Abeona Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fate Therapeutics and Abeona Therapeutics

The main advantage of trading using opposite Fate Therapeutics and Abeona Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, Abeona 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 Abeona Therapeutics will offset losses from the drop in Abeona Therapeutics' long position.
The idea behind Fate Therapeutics and Abeona Therapeutics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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