Correlation Between Arcellx and Passage Bio
Can any of the company-specific risk be diversified away by investing in both Arcellx and Passage 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 Arcellx and Passage Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcellx and Passage Bio, you can compare the effects of market volatilities on Arcellx and Passage 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 Arcellx with a short position of Passage Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcellx and Passage Bio.
Diversification Opportunities for Arcellx and Passage Bio
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arcellx and Passage is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Arcellx and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio and Arcellx 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 Arcellx are associated (or correlated) with Passage Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passage Bio has no effect on the direction of Arcellx i.e., Arcellx and Passage Bio go up and down completely randomly.
Pair Corralation between Arcellx and Passage Bio
Given the investment horizon of 90 days Arcellx is expected to generate 0.82 times more return on investment than Passage Bio. However, Arcellx is 1.23 times less risky than Passage Bio. It trades about -0.07 of its potential returns per unit of risk. Passage Bio is currently generating about -0.13 per unit of risk. If you would invest 6,813 in Arcellx on December 2, 2024 and sell it today you would lose (331.00) from holding Arcellx or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcellx vs. Passage Bio
Performance |
| Timeline |
| Arcellx |
| Passage Bio |
Arcellx and Passage Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcellx and Passage Bio
The main advantage of trading using opposite Arcellx and Passage Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcellx position performs unexpectedly, Passage 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 Passage Bio will offset losses from the drop in Passage Bio's long position.| Arcellx vs. Nuvalent | ||
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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