Correlation Between Abbott Laboratories and Bicara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and Bicara Therapeutics 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 Abbott Laboratories and Bicara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Bicara Therapeutics Common, you can compare the effects of market volatilities on Abbott Laboratories and Bicara Therapeutics 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 Abbott Laboratories with a short position of Bicara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Bicara Therapeutics.
Diversification Opportunities for Abbott Laboratories and Bicara Therapeutics
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abbott and Bicara is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Bicara Therapeutics Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicara Therapeutics and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with Bicara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bicara Therapeutics has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and Bicara Therapeutics go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Bicara Therapeutics
Considering the 90-day investment horizon Abbott Laboratories is expected to generate 5.96 times less return on investment than Bicara Therapeutics. But when comparing it to its historical volatility, Abbott Laboratories is 5.32 times less risky than Bicara Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Bicara Therapeutics Common is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Bicara Therapeutics Common on September 2, 2024 and sell it today you would earn a total of 279.00 from holding Bicara Therapeutics Common or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.06% |
| Values | Daily Returns |
Abbott Laboratories vs. Bicara Therapeutics Common
Performance |
| Timeline |
| Abbott Laboratories |
| Bicara Therapeutics |
Abbott Laboratories and Bicara Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and Bicara Therapeutics
The main advantage of trading using opposite Abbott Laboratories and Bicara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, Bicara Therapeutics 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 Bicara Therapeutics will offset losses from the drop in Bicara Therapeutics' long position.| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
| Bicara Therapeutics vs. Tff Pharmaceuticals | Bicara Therapeutics vs. Eliem Therapeutics | Bicara Therapeutics vs. Inhibrx | Bicara Therapeutics vs. Enliven Therapeutics |
Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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