Correlation Between Precision BioSciences and Agios Pharm
Can any of the company-specific risk be diversified away by investing in both Precision BioSciences and Agios Pharm 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 Precision BioSciences and Agios Pharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision BioSciences and Agios Pharm, you can compare the effects of market volatilities on Precision BioSciences and Agios Pharm 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 Precision BioSciences with a short position of Agios Pharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision BioSciences and Agios Pharm.
Diversification Opportunities for Precision BioSciences and Agios Pharm
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Precision and Agios is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Precision BioSciences and Agios Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agios Pharm and Precision 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 Precision BioSciences are associated (or correlated) with Agios Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agios Pharm has no effect on the direction of Precision BioSciences i.e., Precision BioSciences and Agios Pharm go up and down completely randomly.
Pair Corralation between Precision BioSciences and Agios Pharm
Given the investment horizon of 90 days Precision BioSciences is expected to under-perform the Agios Pharm. But the stock apears to be less risky and, when comparing its historical volatility, Precision BioSciences is 1.06 times less risky than Agios Pharm. The stock trades about -0.33 of its potential returns per unit of risk. The Agios Pharm is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,433 in Agios Pharm on August 24, 2024 and sell it today you would earn a total of 1,121 from holding Agios Pharm or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision BioSciences vs. Agios Pharm
Performance |
| Timeline |
| Precision BioSciences |
| Agios Pharm |
Precision BioSciences and Agios Pharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision BioSciences and Agios Pharm
The main advantage of trading using opposite Precision BioSciences and Agios Pharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision BioSciences position performs unexpectedly, Agios Pharm 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 Agios Pharm will offset losses from the drop in Agios Pharm's long position.| Precision BioSciences vs. X4 Pharmaceuticals | Precision BioSciences vs. Acumen Pharmaceuticals | Precision BioSciences vs. Inozyme Pharma | Precision BioSciences vs. Terns Pharmaceuticals |
| Agios Pharm vs. Mereo BioPharma Group | Agios Pharm vs. Blueprint Medicines Corp | Agios Pharm vs. Day One Biopharmaceuticals | Agios Pharm vs. Biomarin Pharmaceutical |
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 CEOs Directory module to screen CEOs from public companies around the world.
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