Correlation Between Centessa Pharmaceuticals and BAIYU Holdings
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals and BAIYU Holdings 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 Centessa Pharmaceuticals and BAIYU Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and BAIYU Holdings, you can compare the effects of market volatilities on Centessa Pharmaceuticals and BAIYU Holdings 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 Centessa Pharmaceuticals with a short position of BAIYU Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and BAIYU Holdings.
Diversification Opportunities for Centessa Pharmaceuticals and BAIYU Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centessa and BAIYU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and BAIYU Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIYU Holdings and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC are associated (or correlated) with BAIYU Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIYU Holdings has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and BAIYU Holdings go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and BAIYU Holdings
If you would invest 380.00 in Centessa Pharmaceuticals PLC on November 28, 2024 and sell it today you would earn a total of 1,214 from holding Centessa Pharmaceuticals PLC or generate 319.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. BAIYU Holdings
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| BAIYU Holdings |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Centessa Pharmaceuticals and BAIYU Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and BAIYU Holdings
The main advantage of trading using opposite Centessa Pharmaceuticals and BAIYU Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals position performs unexpectedly, BAIYU Holdings 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 BAIYU Holdings will offset losses from the drop in BAIYU Holdings' long position.The idea behind Centessa Pharmaceuticals PLC and BAIYU Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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