Correlation Between Caribou Biosciences and Sangamo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Caribou Biosciences and Sangamo 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 Caribou Biosciences and Sangamo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caribou Biosciences and Sangamo Therapeutics, you can compare the effects of market volatilities on Caribou Biosciences and Sangamo 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 Caribou Biosciences with a short position of Sangamo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribou Biosciences and Sangamo Therapeutics.
Diversification Opportunities for Caribou Biosciences and Sangamo Therapeutics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caribou and Sangamo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Sangamo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangamo Therapeutics 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 Sangamo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangamo Therapeutics has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Sangamo Therapeutics go up and down completely randomly.
Pair Corralation between Caribou Biosciences and Sangamo Therapeutics
Given the investment horizon of 90 days Caribou Biosciences is expected to generate 0.64 times more return on investment than Sangamo Therapeutics. However, Caribou Biosciences is 1.56 times less risky than Sangamo Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Sangamo Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 188.00 in Caribou Biosciences on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Caribou Biosciences or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caribou Biosciences vs. Sangamo Therapeutics
Performance |
| Timeline |
| Caribou Biosciences |
| Sangamo Therapeutics |
Caribou Biosciences and Sangamo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caribou Biosciences and Sangamo Therapeutics
The main advantage of trading using opposite Caribou Biosciences and Sangamo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caribou Biosciences position performs unexpectedly, Sangamo 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 Sangamo Therapeutics will offset losses from the drop in Sangamo Therapeutics' long position.| Caribou Biosciences vs. Intellia Therapeutics | Caribou Biosciences vs. Editas Medicine | Caribou Biosciences vs. Crispr Therapeutics AG | Caribou Biosciences vs. Verve Therapeutics |
| Sangamo Therapeutics vs. Editas Medicine | Sangamo Therapeutics vs. Intellia Therapeutics | Sangamo Therapeutics vs. Bluebird bio | Sangamo Therapeutics vs. Alnylam 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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