Correlation Between Beam Therapeutics and Intellia Therapeutics
Can any of the company-specific risk be diversified away by investing in both Beam Therapeutics and Intellia 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 Beam Therapeutics and Intellia Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Therapeutics and Intellia Therapeutics, you can compare the effects of market volatilities on Beam Therapeutics and Intellia 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 Beam Therapeutics with a short position of Intellia Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Therapeutics and Intellia Therapeutics.
Diversification Opportunities for Beam Therapeutics and Intellia Therapeutics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beam and Intellia is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics and Intellia Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellia Therapeutics and Beam 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 Beam Therapeutics are associated (or correlated) with Intellia Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellia Therapeutics has no effect on the direction of Beam Therapeutics i.e., Beam Therapeutics and Intellia Therapeutics go up and down completely randomly.
Pair Corralation between Beam Therapeutics and Intellia Therapeutics
Given the investment horizon of 90 days Beam Therapeutics is expected to generate 1.19 times more return on investment than Intellia Therapeutics. However, Beam Therapeutics is 1.19 times more volatile than Intellia Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Intellia Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 2,957 in Beam Therapeutics on August 27, 2024 and sell it today you would lose (452.00) from holding Beam Therapeutics or give up 15.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Therapeutics vs. Intellia Therapeutics
Performance |
| Timeline |
| Beam Therapeutics |
| Intellia Therapeutics |
Beam Therapeutics and Intellia Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Therapeutics and Intellia Therapeutics
The main advantage of trading using opposite Beam Therapeutics and Intellia Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Therapeutics position performs unexpectedly, Intellia 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 Intellia Therapeutics will offset losses from the drop in Intellia Therapeutics' long position.| Beam Therapeutics vs. Eliem Therapeutics | Beam Therapeutics vs. HCW Biologics | Beam Therapeutics vs. Scpharmaceuticals | Beam Therapeutics vs. Milestone Pharmaceuticals |
| Intellia Therapeutics vs. Editas Medicine | Intellia Therapeutics vs. Caribou Biosciences | Intellia Therapeutics vs. Crispr Therapeutics AG | Intellia Therapeutics vs. Verve Therapeutics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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