Correlation Between Bright Minds and Sangamo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bright Minds 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 Bright Minds and Sangamo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Minds Biosciences and Sangamo Therapeutics, you can compare the effects of market volatilities on Bright Minds 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 Bright Minds with a short position of Sangamo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Minds and Sangamo Therapeutics.
Diversification Opportunities for Bright Minds and Sangamo Therapeutics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bright and Sangamo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and Sangamo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangamo Therapeutics and Bright Minds 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 Bright Minds 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 Bright Minds i.e., Bright Minds and Sangamo Therapeutics go up and down completely randomly.
Pair Corralation between Bright Minds and Sangamo Therapeutics
Given the investment horizon of 90 days Bright Minds Biosciences is expected to under-perform the Sangamo Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Bright Minds Biosciences is 1.25 times less risky than Sangamo Therapeutics. The stock trades about -0.01 of its potential returns per unit of risk. The Sangamo Therapeutics is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Sangamo Therapeutics on September 1, 2024 and sell it today you would earn a total of 56.00 from holding Sangamo Therapeutics or generate 32.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Minds Biosciences vs. Sangamo Therapeutics
Performance |
| Timeline |
| Bright Minds Biosciences |
| Sangamo Therapeutics |
Bright Minds and Sangamo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Minds and Sangamo Therapeutics
The main advantage of trading using opposite Bright Minds and Sangamo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Minds 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.| Bright Minds vs. Revelation Biosciences | Bright Minds vs. Zura Bio Limited | Bright Minds vs. Phio Pharmaceuticals Corp | Bright Minds vs. ZyVersa 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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