Correlation Between ATyr Pharma and Caribou Biosciences

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

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

Diversification Opportunities for ATyr Pharma and Caribou Biosciences

0.05

Correlation Coefficient

ATyr Pharma  Caribou Biosciences

Significant diversification

The 3 months correlation between ATyr and Caribou is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding ATyr Pharma and Caribou Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caribou Biosciences and ATyr Pharma 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 ATyr Pharma are associated (or correlated) with Caribou Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caribou Biosciences has no effect on the direction of ATyr Pharma i.e., ATyr Pharma and Caribou Biosciences go up and down completely randomly.

Pair Corralation between ATyr Pharma and Caribou Biosciences

If you would invest  183.00  in Caribou Biosciences on September 5, 2024 and sell it today you would earn a total of  34.00  from holding Caribou Biosciences or generate 18.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ATyr Pharma  vs.  Caribou Biosciences

ATyr Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATyr Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ATyr Pharma is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Caribou Biosciences

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Caribou Biosciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Caribou Biosciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATyr Pharma and Caribou Biosciences

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

The idea behind ATyr Pharma and Caribou Biosciences 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 Transaction History module to view history of all your transactions and understand their impact on performance.