Correlation Between Caribou Biosciences and Natera
Can any of the company-specific risk be diversified away by investing in both Caribou Biosciences and Natera 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 Caribou Biosciences and Natera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caribou Biosciences and Natera Inc, you can compare the effects of market volatilities on Caribou Biosciences and Natera 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 Caribou Biosciences with a short position of Natera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribou Biosciences and Natera.
Diversification Opportunities for Caribou Biosciences and Natera
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caribou and Natera is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc and Caribou Biosciences 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 Caribou Biosciences are associated (or correlated) with Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Natera go up and down completely randomly.
Pair Corralation between Caribou Biosciences and Natera
Given the investment horizon of 90 days Caribou Biosciences is expected to under-perform the Natera. In addition to that, Caribou Biosciences is 1.83 times more volatile than Natera Inc. It trades about -0.06 of its total potential returns per unit of risk. Natera Inc is currently generating about 0.14 per unit of volatility. If you would invest 9,033 in Natera Inc on October 14, 2024 and sell it today you would earn a total of 8,467 from holding Natera Inc or generate 93.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caribou Biosciences vs. Natera Inc
Performance |
| Timeline |
| Caribou Biosciences |
| Natera Inc |
Caribou Biosciences and Natera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caribou Biosciences and Natera
The main advantage of trading using opposite Caribou Biosciences and Natera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caribou Biosciences position performs unexpectedly, Natera 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 Natera will offset losses from the drop in Natera's long position.| Caribou Biosciences vs. Intellia Therapeutics | Caribou Biosciences vs. Editas Medicine | Caribou Biosciences vs. Crispr Therapeutics AG | Caribou Biosciences 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |