Correlation Between Adagene and Senti Biosciences
Can any of the company-specific risk be diversified away by investing in both Adagene and Senti Biosciences 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 Adagene and Senti Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and Senti Biosciences, you can compare the effects of market volatilities on Adagene and Senti Biosciences 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 Adagene with a short position of Senti Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and Senti Biosciences.
Diversification Opportunities for Adagene and Senti Biosciences
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adagene and Senti is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Senti Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senti Biosciences and Adagene 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 Adagene are associated (or correlated) with Senti Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senti Biosciences has no effect on the direction of Adagene i.e., Adagene and Senti Biosciences go up and down completely randomly.
Pair Corralation between Adagene and Senti Biosciences
Given the investment horizon of 90 days Adagene is expected to under-perform the Senti Biosciences. In addition to that, Adagene is 1.53 times more volatile than Senti Biosciences. It trades about -0.16 of its total potential returns per unit of risk. Senti Biosciences is currently generating about 0.01 per unit of volatility. If you would invest 217.00 in Senti Biosciences on September 1, 2024 and sell it today you would lose (1.00) from holding Senti Biosciences or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. Senti Biosciences
Performance |
| Timeline |
| Adagene |
| Senti Biosciences |
Adagene and Senti Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and Senti Biosciences
The main advantage of trading using opposite Adagene and Senti Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, Senti Biosciences 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 Senti Biosciences will offset losses from the drop in Senti Biosciences' long position.| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
| Senti Biosciences vs. Cadrenal Therapeutics, Common | Senti Biosciences vs. Foghorn Therapeutics | Senti Biosciences vs. Quoin Pharmaceuticals Ltd | Senti Biosciences vs. SAB Biotherapeutics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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