Correlation Between Bicycle Therapeutics and Magenta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bicycle Therapeutics 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 Bicycle Therapeutics and Magenta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bicycle Therapeutics and Magenta Therapeutics, you can compare the effects of market volatilities on Bicycle Therapeutics 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 Bicycle Therapeutics with a short position of Magenta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bicycle Therapeutics and Magenta Therapeutics.
Diversification Opportunities for Bicycle Therapeutics and Magenta Therapeutics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bicycle and Magenta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bicycle Therapeutics and Magenta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magenta Therapeutics and Bicycle 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 Bicycle Therapeutics 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 Bicycle Therapeutics i.e., Bicycle Therapeutics and Magenta Therapeutics go up and down completely randomly.
Pair Corralation between Bicycle Therapeutics and Magenta Therapeutics
If you would invest 82.00 in Magenta Therapeutics on September 12, 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 | 0.81% |
| Values | Daily Returns |
Bicycle Therapeutics vs. Magenta Therapeutics
Performance |
| Timeline |
| Bicycle Therapeutics |
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bicycle Therapeutics and Magenta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bicycle Therapeutics and Magenta Therapeutics
The main advantage of trading using opposite Bicycle Therapeutics and Magenta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bicycle Therapeutics 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.| Bicycle Therapeutics vs. Equillium | Bicycle Therapeutics vs. DiaMedica Therapeutics | Bicycle Therapeutics vs. Valneva SE ADR | Bicycle Therapeutics vs. Vivani Medical |
| 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 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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