Correlation Between Tenaya Therapeutics and Sqz Biotechnologies

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

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

Diversification Opportunities for Tenaya Therapeutics and Sqz Biotechnologies

-0.43

Correlation Coefficient

Tenaya Therapeutics  Sqz Biotechnologies

Very good diversification

The 3 months correlation between Tenaya and Sqz is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tenaya Therapeutics and Sqz Biotechnologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sqz Biotechnologies and Tenaya 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 Tenaya Therapeutics are associated (or correlated) with Sqz Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sqz Biotechnologies has no effect on the direction of Tenaya Therapeutics i.e., Tenaya Therapeutics and Sqz Biotechnologies go up and down completely randomly.

Pair Corralation between Tenaya Therapeutics and Sqz Biotechnologies

If you would invest  253.00  in Tenaya Therapeutics on September 3, 2024 and sell it today you would earn a total of  104.00  from holding Tenaya Therapeutics or generate 41.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Tenaya Therapeutics  vs.  Sqz Biotechnologies Co

Tenaya Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tenaya Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Tenaya Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Sqz Biotechnologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Tenaya Therapeutics and Sqz Biotechnologies

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

The idea behind Tenaya Therapeutics and Sqz Biotechnologies Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.