Correlation Between Centessa Pharmaceuticals and Stagwell
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Centessa Pharmaceuticals and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Stagwell.
Diversification Opportunities for Centessa Pharmaceuticals and Stagwell
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centessa and Stagwell is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Stagwell go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Stagwell
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 1.65 times more return on investment than Stagwell. However, Centessa Pharmaceuticals is 1.65 times more volatile than Stagwell. It trades about 0.13 of its potential returns per unit of risk. Stagwell is currently generating about 0.09 per unit of risk. If you would invest 1,350 in Centessa Pharmaceuticals PLC on September 2, 2024 and sell it today you would earn a total of 441.00 from holding Centessa Pharmaceuticals PLC or generate 32.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Stagwell
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| Stagwell |
Centessa Pharmaceuticals and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and Stagwell
The main advantage of trading using opposite Centessa Pharmaceuticals and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| Centessa Pharmaceuticals vs. Tff Pharmaceuticals | Centessa Pharmaceuticals vs. Eliem Therapeutics | Centessa Pharmaceuticals vs. Inhibrx | Centessa Pharmaceuticals vs. Enliven Therapeutics |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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