Correlation Between Cyclacel Pharmaceuticals and Senti Biosciences
Can any of the company-specific risk be diversified away by investing in both Cyclacel Pharmaceuticals and Senti 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 Cyclacel Pharmaceuticals and Senti Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyclacel Pharmaceuticals and Senti Biosciences, you can compare the effects of market volatilities on Cyclacel Pharmaceuticals and Senti 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 Cyclacel Pharmaceuticals with a short position of Senti Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyclacel Pharmaceuticals and Senti Biosciences.
Diversification Opportunities for Cyclacel Pharmaceuticals and Senti Biosciences
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cyclacel and Senti is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cyclacel Pharmaceuticals and Senti Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senti Biosciences and Cyclacel 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 Cyclacel Pharmaceuticals are associated (or correlated) with Senti Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senti Biosciences has no effect on the direction of Cyclacel Pharmaceuticals i.e., Cyclacel Pharmaceuticals and Senti Biosciences go up and down completely randomly.
Pair Corralation between Cyclacel Pharmaceuticals and Senti Biosciences
Given the investment horizon of 90 days Cyclacel Pharmaceuticals is expected to under-perform the Senti Biosciences. In addition to that, Cyclacel Pharmaceuticals is 1.03 times more volatile than Senti Biosciences. It trades about -0.05 of its total potential returns per unit of risk. Senti Biosciences is currently generating about -0.03 per unit of volatility. If you would invest 1,970 in Senti Biosciences on August 29, 2024 and sell it today you would lose (1,756) from holding Senti Biosciences or give up 89.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyclacel Pharmaceuticals vs. Senti Biosciences
Performance |
| Timeline |
| Cyclacel Pharmaceuticals |
| Senti Biosciences |
Cyclacel Pharmaceuticals and Senti Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyclacel Pharmaceuticals and Senti Biosciences
The main advantage of trading using opposite Cyclacel Pharmaceuticals and Senti Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclacel Pharmaceuticals position performs unexpectedly, Senti 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 Senti Biosciences will offset losses from the drop in Senti Biosciences' long position.| Cyclacel Pharmaceuticals vs. Eliem Therapeutics | Cyclacel Pharmaceuticals vs. Ikena Oncology | Cyclacel Pharmaceuticals vs. Ovid Therapeutics | Cyclacel Pharmaceuticals vs. Connect Biopharma Holdings |
| Senti Biosciences vs. Cadrenal Therapeutics, Common | Senti Biosciences vs. Foghorn Therapeutics | Senti Biosciences vs. Quoin Pharmaceuticals Ltd | Senti Biosciences vs. SAB Biotherapeutics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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