Correlation Between Cepton and Revelation Biosciences
Can any of the company-specific risk be diversified away by investing in both Cepton and Revelation Biosciences 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 Cepton and Revelation Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Revelation Biosciences, you can compare the effects of market volatilities on Cepton and Revelation Biosciences 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 Cepton with a short position of Revelation Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Revelation Biosciences.
Diversification Opportunities for Cepton and Revelation Biosciences
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cepton and Revelation is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Revelation Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revelation Biosciences and Cepton 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 Cepton Inc are associated (or correlated) with Revelation Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revelation Biosciences has no effect on the direction of Cepton i.e., Cepton and Revelation Biosciences go up and down completely randomly.
Pair Corralation between Cepton and Revelation Biosciences
Assuming the 90 days horizon Cepton is expected to generate 5.27 times less return on investment than Revelation Biosciences. But when comparing it to its historical volatility, Cepton Inc is 4.21 times less risky than Revelation Biosciences. It trades about 0.06 of its potential returns per unit of risk. Revelation Biosciences is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.97 in Revelation Biosciences on August 26, 2024 and sell it today you would earn a total of 0.27 from holding Revelation Biosciences or generate 27.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Cepton Inc vs. Revelation Biosciences
Performance |
| Timeline |
| Cepton Inc |
| Revelation Biosciences |
Cepton and Revelation Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Revelation Biosciences
The main advantage of trading using opposite Cepton and Revelation Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Revelation Biosciences 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 Revelation Biosciences will offset losses from the drop in Revelation Biosciences' long position.| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
| Revelation Biosciences vs. Eliem Therapeutics | Revelation Biosciences vs. HCW Biologics | Revelation Biosciences vs. Scpharmaceuticals | Revelation Biosciences vs. Milestone Pharmaceuticals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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