Correlation Between Biotron and Magenta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biotron 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 Biotron and Magenta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotron Limited and Magenta Therapeutics, you can compare the effects of market volatilities on Biotron 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 Biotron with a short position of Magenta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotron and Magenta Therapeutics.
Diversification Opportunities for Biotron and Magenta Therapeutics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Biotron and Magenta is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Biotron Limited and Magenta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magenta Therapeutics and Biotron 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 Biotron Limited 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 Biotron i.e., Biotron and Magenta Therapeutics go up and down completely randomly.
Pair Corralation between Biotron and Magenta Therapeutics
If you would invest 82.00 in Magenta Therapeutics on September 3, 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 Together |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Biotron Limited vs. Magenta Therapeutics
Performance |
| Timeline |
| Biotron Limited |
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Biotron and Magenta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotron and Magenta Therapeutics
The main advantage of trading using opposite Biotron and Magenta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotron 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.| Biotron vs. biOasis Technologies | Biotron vs. Covalon Technologies | Biotron vs. Mosaic Immunoengineering | Biotron vs. Cellectis SA |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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