Correlation Between Precision BioSciences and Frequency Therapeutics
Can any of the company-specific risk be diversified away by investing in both Precision BioSciences and Frequency 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 Precision BioSciences and Frequency Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision BioSciences and Frequency Therapeutics, you can compare the effects of market volatilities on Precision BioSciences and Frequency 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 Precision BioSciences with a short position of Frequency Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision BioSciences and Frequency Therapeutics.
Diversification Opportunities for Precision BioSciences and Frequency Therapeutics
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Precision and Frequency is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Precision BioSciences and Frequency Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Therapeutics 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 Frequency Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Therapeutics has no effect on the direction of Precision BioSciences i.e., Precision BioSciences and Frequency Therapeutics go up and down completely randomly.
Pair Corralation between Precision BioSciences and Frequency Therapeutics
Given the investment horizon of 90 days Precision BioSciences is expected to generate 0.88 times more return on investment than Frequency Therapeutics. However, Precision BioSciences is 1.14 times less risky than Frequency Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Frequency Therapeutics is currently generating about -0.31 per unit of risk. If you would invest 504.00 in Precision BioSciences on November 29, 2024 and sell it today you would earn a total of 47.00 from holding Precision BioSciences or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision BioSciences vs. Frequency Therapeutics
Performance |
| Timeline |
| Precision BioSciences |
| Frequency Therapeutics |
Precision BioSciences and Frequency Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision BioSciences and Frequency Therapeutics
The main advantage of trading using opposite Precision BioSciences and Frequency Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision BioSciences position performs unexpectedly, Frequency 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 Frequency Therapeutics will offset losses from the drop in Frequency Therapeutics' long position.| Precision BioSciences vs. X4 Pharmaceuticals | Precision BioSciences vs. Acumen Pharmaceuticals | Precision BioSciences vs. Inozyme Pharma | Precision BioSciences vs. Terns Pharmaceuticals |
| Frequency Therapeutics vs. IPG Photonics | Frequency Therapeutics vs. Axcelis Technologies | Frequency Therapeutics vs. Amkor Technology | Frequency Therapeutics vs. Lithium Americas Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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