Correlation Between Axcella Health and Magenta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Axcella Health and Magenta 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 Axcella Health and Magenta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcella Health and Magenta Therapeutics, you can compare the effects of market volatilities on Axcella Health and Magenta 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 Axcella Health with a short position of Magenta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcella Health and Magenta Therapeutics.
Diversification Opportunities for Axcella Health and Magenta Therapeutics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axcella and Magenta is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Magenta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magenta Therapeutics and Axcella Health 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 Axcella Health are associated (or correlated) with Magenta Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magenta Therapeutics has no effect on the direction of Axcella Health i.e., Axcella Health and Magenta Therapeutics go up and down completely randomly.
Pair Corralation between Axcella Health and Magenta Therapeutics
If you would invest 82.00 in Magenta Therapeutics on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Magenta Therapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axcella Health vs. Magenta Therapeutics
Performance |
| Timeline |
| Axcella Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Axcella Health and Magenta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcella Health and Magenta Therapeutics
The main advantage of trading using opposite Axcella Health and Magenta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcella Health position performs unexpectedly, Magenta 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 Magenta Therapeutics will offset losses from the drop in Magenta Therapeutics' long position.| Axcella Health vs. Cyclerion Therapeutics | Axcella Health vs. Kezar Life Sciences | Axcella Health vs. CytomX Therapeutics | Axcella Health vs. Assembly Biosciences |
| Magenta Therapeutics vs. Assembly Biosciences | Magenta Therapeutics vs. Instil Bio | Magenta Therapeutics vs. Nuvation Bio | Magenta Therapeutics vs. Achilles Therapeutics PLC |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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