Correlation Between Allogene Therapeutics and Ginkgo Bioworks
Can any of the company-specific risk be diversified away by investing in both Allogene Therapeutics and Ginkgo Bioworks 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 Allogene Therapeutics and Ginkgo Bioworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allogene Therapeutics and Ginkgo Bioworks Holdings, you can compare the effects of market volatilities on Allogene Therapeutics and Ginkgo Bioworks 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 Allogene Therapeutics with a short position of Ginkgo Bioworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allogene Therapeutics and Ginkgo Bioworks.
Diversification Opportunities for Allogene Therapeutics and Ginkgo Bioworks
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allogene and Ginkgo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Allogene Therapeutics and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings and Allogene 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 Allogene Therapeutics are associated (or correlated) with Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of Allogene Therapeutics i.e., Allogene Therapeutics and Ginkgo Bioworks go up and down completely randomly.
Pair Corralation between Allogene Therapeutics and Ginkgo Bioworks
Given the investment horizon of 90 days Allogene Therapeutics is expected to generate 29.34 times less return on investment than Ginkgo Bioworks. But when comparing it to its historical volatility, Allogene Therapeutics is 1.61 times less risky than Ginkgo Bioworks. It trades about 0.01 of its potential returns per unit of risk. Ginkgo Bioworks Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 874.00 in Ginkgo Bioworks Holdings on October 20, 2024 and sell it today you would earn a total of 209.00 from holding Ginkgo Bioworks Holdings or generate 23.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allogene Therapeutics vs. Ginkgo Bioworks Holdings
Performance |
| Timeline |
| Allogene Therapeutics |
| Ginkgo Bioworks Holdings |
Allogene Therapeutics and Ginkgo Bioworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allogene Therapeutics and Ginkgo Bioworks
The main advantage of trading using opposite Allogene Therapeutics and Ginkgo Bioworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allogene Therapeutics position performs unexpectedly, Ginkgo Bioworks 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 Ginkgo Bioworks will offset losses from the drop in Ginkgo Bioworks' long position.| Allogene Therapeutics vs. Heron Therapeuti | Allogene Therapeutics vs. Annexon | Allogene Therapeutics vs. Sangamo Therapeutics | Allogene Therapeutics vs. Beam Therapeutics |
| Ginkgo Bioworks vs. Ocean Biomedical | Ginkgo Bioworks vs. Enveric Biosciences | Ginkgo Bioworks vs. Hepion Pharmaceuticals | Ginkgo Bioworks vs. Elevation Oncology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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