Correlation Between Vor Biopharma and Gracell Biotechnologies

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

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

Diversification Opportunities for Vor Biopharma and Gracell Biotechnologies

0.68

Correlation Coefficient

Vor Biopharma  Gracell Biotechnologies

Poor diversification

The 3 months correlation between Vor and Gracell is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vor Biopharma and Gracell Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gracell Biotechnologies and Vor Biopharma 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 Vor Biopharma are associated (or correlated) with Gracell Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gracell Biotechnologies has no effect on the direction of Vor Biopharma i.e., Vor Biopharma and Gracell Biotechnologies go up and down completely randomly.

Pair Corralation between Vor Biopharma and Gracell Biotechnologies

If you would invest  90.00  in Vor Biopharma on September 20, 2024 and sell it today you would lose (1.00) from holding Vor Biopharma or give up 1.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Vor Biopharma  vs.  Gracell Biotechnologies

Vor Biopharma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vor Biopharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Vor Biopharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gracell Biotechnologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gracell Biotechnologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Gracell Biotechnologies is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vor Biopharma and Gracell Biotechnologies

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

The idea behind Vor Biopharma and Gracell Biotechnologies 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.