Correlation Between Allogene Therapeutics and Fate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Allogene Therapeutics and Fate 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 Allogene Therapeutics and Fate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allogene Therapeutics and Fate Therapeutics, you can compare the effects of market volatilities on Allogene Therapeutics and Fate 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 Allogene Therapeutics with a short position of Fate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allogene Therapeutics and Fate Therapeutics.
Diversification Opportunities for Allogene Therapeutics and Fate Therapeutics
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allogene and Fate is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Allogene Therapeutics and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics 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 Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Allogene Therapeutics i.e., Allogene Therapeutics and Fate Therapeutics go up and down completely randomly.
Pair Corralation between Allogene Therapeutics and Fate Therapeutics
Given the investment horizon of 90 days Allogene Therapeutics is expected to generate 1.01 times more return on investment than Fate Therapeutics. However, Allogene Therapeutics is 1.01 times more volatile than Fate Therapeutics. It trades about -0.05 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.13 per unit of risk. If you would invest 280.00 in Allogene Therapeutics on August 25, 2024 and sell it today you would lose (59.00) from holding Allogene Therapeutics or give up 21.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allogene Therapeutics vs. Fate Therapeutics
Performance |
| Timeline |
| Allogene Therapeutics |
| Fate Therapeutics |
Allogene Therapeutics and Fate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allogene Therapeutics and Fate Therapeutics
The main advantage of trading using opposite Allogene Therapeutics and Fate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allogene Therapeutics position performs unexpectedly, Fate 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 Fate Therapeutics will offset losses from the drop in Fate Therapeutics' long position.| Allogene Therapeutics vs. Heron Therapeuti | Allogene Therapeutics vs. Annexon | Allogene Therapeutics vs. Sangamo Therapeutics | Allogene Therapeutics vs. Beam Therapeutics |
| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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