Correlation Between Fate Therapeutics and ATAI Life
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and ATAI Life 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 ATAI Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and ATAI Life Sciences, you can compare the effects of market volatilities on Fate Therapeutics and ATAI Life 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 ATAI Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and ATAI Life.
Diversification Opportunities for Fate Therapeutics and ATAI Life
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fate and ATAI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and ATAI Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATAI Life Sciences 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 ATAI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATAI Life Sciences has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and ATAI Life go up and down completely randomly.
Pair Corralation between Fate Therapeutics and ATAI Life
Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the ATAI Life. In addition to that, Fate Therapeutics is 1.19 times more volatile than ATAI Life Sciences. It trades about -0.14 of its total potential returns per unit of risk. ATAI Life Sciences is currently generating about 0.04 per unit of volatility. If you would invest 119.00 in ATAI Life Sciences on September 26, 2024 and sell it today you would earn a total of 4.00 from holding ATAI Life Sciences or generate 3.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fate Therapeutics vs. ATAI Life Sciences
Performance |
Timeline |
Fate Therapeutics |
ATAI Life Sciences |
Fate Therapeutics and ATAI Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fate Therapeutics and ATAI Life
The main advantage of trading using opposite Fate Therapeutics and ATAI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, ATAI Life 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 ATAI Life will offset losses from the drop in ATAI Life's long position.Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
ATAI Life vs. Fate Therapeutics | ATAI Life vs. Caribou Biosciences | ATAI Life vs. Karyopharm Therapeutics | ATAI Life vs. Hookipa Pharma |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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