Correlation Between EnGene Holdings and Beam Therapeutics
Can any of the company-specific risk be diversified away by investing in both EnGene Holdings and Beam 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 EnGene Holdings and Beam Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between enGene Holdings Common and Beam Therapeutics, you can compare the effects of market volatilities on EnGene Holdings and Beam 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 EnGene Holdings with a short position of Beam Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnGene Holdings and Beam Therapeutics.
Diversification Opportunities for EnGene Holdings and Beam Therapeutics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between EnGene and Beam is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding enGene Holdings Common and Beam Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beam Therapeutics and EnGene Holdings 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 enGene Holdings Common are associated (or correlated) with Beam Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beam Therapeutics has no effect on the direction of EnGene Holdings i.e., EnGene Holdings and Beam Therapeutics go up and down completely randomly.
Pair Corralation between EnGene Holdings and Beam Therapeutics
Given the investment horizon of 90 days enGene Holdings Common is expected to generate 0.87 times more return on investment than Beam Therapeutics. However, enGene Holdings Common is 1.15 times less risky than Beam Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Beam Therapeutics is currently generating about 0.07 per unit of risk. If you would invest 660.00 in enGene Holdings Common on August 30, 2024 and sell it today you would earn a total of 208.00 from holding enGene Holdings Common or generate 31.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
enGene Holdings Common vs. Beam Therapeutics
Performance |
| Timeline |
| enGene Holdings Common |
| Beam Therapeutics |
EnGene Holdings and Beam Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnGene Holdings and Beam Therapeutics
The main advantage of trading using opposite EnGene Holdings and Beam Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnGene Holdings position performs unexpectedly, Beam 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 Beam Therapeutics will offset losses from the drop in Beam Therapeutics' long position.| EnGene Holdings vs. Agilent Technologies | EnGene Holdings vs. Equillium | EnGene Holdings vs. 23Andme Holding Co | EnGene Holdings vs. DiaMedica Therapeutics |
| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve Therapeutics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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