Correlation Between Magenta Therapeutics and Bioatla

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

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

Diversification Opportunities for Magenta Therapeutics and Bioatla

-0.7

Correlation Coefficient

Magenta Therapeutics  Bioatla

Excellent diversification

The 3 months correlation between Magenta and Bioatla is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Magenta Therapeutics and Bioatla in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioatla and Magenta 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 Magenta Therapeutics are associated (or correlated) with Bioatla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioatla has no effect on the direction of Magenta Therapeutics i.e., Magenta Therapeutics and Bioatla go up and down completely randomly.

Pair Corralation between Magenta Therapeutics and Bioatla

If you would invest  199.00  in Bioatla on September 13, 2024 and sell it today you would lose (38.00) from holding Bioatla or give up 19.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.4%
Values	Daily Returns

Magenta Therapeutics  vs.  Bioatla

Magenta Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Magenta Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Magenta Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bioatla

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioatla has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bioatla is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Magenta Therapeutics and Bioatla

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

The idea behind Magenta Therapeutics and Bioatla 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.