Correlation Between Sensei Biotherapeutics and Instil Bio

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

Diversification Opportunities for Sensei Biotherapeutics and Instil Bio

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Sensei and Instil is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sensei Biotherapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Sensei Biotherapeutics 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 Sensei Biotherapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Sensei Biotherapeutics i.e., Sensei Biotherapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between Sensei Biotherapeutics and Instil Bio

Given the investment horizon of 90 days Sensei Biotherapeutics is expected to generate 1.86 times more return on investment than Instil Bio. However, Sensei Biotherapeutics is 1.86 times more volatile than Instil Bio. It trades about 0.03 of its potential returns per unit of risk. Instil Bio is currently generating about -0.19 per unit of risk. If you would invest  52.00  in Sensei Biotherapeutics on September 17, 2024 and sell it today you would lose (9.00) from holding Sensei Biotherapeutics or give up 17.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sensei Biotherapeutics  vs.  Instil Bio

 Performance 
       Timeline  
Sensei Biotherapeutics 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sensei Biotherapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Sensei Biotherapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.
Instil Bio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sensei Biotherapeutics and Instil Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sensei Biotherapeutics and Instil Bio

The main advantage of trading using opposite Sensei Biotherapeutics and Instil Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensei Biotherapeutics position performs unexpectedly, Instil Bio 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 Instil Bio will offset losses from the drop in Instil Bio's long position.
The idea behind Sensei Biotherapeutics and Instil Bio 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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