Correlation Between Cytokinetics and Gracell Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Cytokinetics and Gracell Biotechnologies 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 Cytokinetics and Gracell Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cytokinetics and Gracell Biotechnologies, you can compare the effects of market volatilities on Cytokinetics and Gracell Biotechnologies 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 Cytokinetics with a short position of Gracell Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cytokinetics and Gracell Biotechnologies.
Diversification Opportunities for Cytokinetics and Gracell Biotechnologies
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cytokinetics and Gracell is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cytokinetics and Gracell Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gracell Biotechnologies and Cytokinetics 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 Cytokinetics are associated (or correlated) with Gracell Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gracell Biotechnologies has no effect on the direction of Cytokinetics i.e., Cytokinetics and Gracell Biotechnologies go up and down completely randomly.
Pair Corralation between Cytokinetics and Gracell Biotechnologies
Given the investment horizon of 90 days Cytokinetics is expected to generate 2.83 times less return on investment than Gracell Biotechnologies. But when comparing it to its historical volatility, Cytokinetics is 1.28 times less risky than Gracell Biotechnologies. It trades about 0.04 of its potential returns per unit of risk. Gracell Biotechnologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 251.00 in Gracell Biotechnologies on August 30, 2024 and sell it today you would earn a total of 151.00 from holding Gracell Biotechnologies or generate 60.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.31% |
| Values | Daily Returns |
Cytokinetics vs. Gracell Biotechnologies
Performance |
| Timeline |
| Cytokinetics |
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cytokinetics and Gracell Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cytokinetics and Gracell Biotechnologies
The main advantage of trading using opposite Cytokinetics and Gracell Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cytokinetics position performs unexpectedly, Gracell Biotechnologies 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 Gracell Biotechnologies will offset losses from the drop in Gracell Biotechnologies' long position.| Cytokinetics vs. Edgewise Therapeutics | Cytokinetics vs. Dyne Therapeutics | Cytokinetics vs. Stoke Therapeutics | Cytokinetics vs. Pliant Therapeutics |
| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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