Correlation Between 89bio and Fate Therapeutics
Can any of the company-specific risk be diversified away by investing in both 89bio and Fate 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 89bio and Fate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 89bio Inc and Fate Therapeutics, you can compare the effects of market volatilities on 89bio and Fate 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 89bio with a short position of Fate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 89bio and Fate Therapeutics.
Diversification Opportunities for 89bio and Fate Therapeutics
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 89bio and Fate is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding 89bio Inc and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics and 89bio 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 89bio Inc are associated (or correlated) with Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of 89bio i.e., 89bio and Fate Therapeutics go up and down completely randomly.
Pair Corralation between 89bio and Fate Therapeutics
Given the investment horizon of 90 days 89bio Inc is expected to generate 0.86 times more return on investment than Fate Therapeutics. However, 89bio Inc is 1.16 times less risky than Fate Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 1,276 in 89bio Inc on November 28, 2024 and sell it today you would lose (359.00) from holding 89bio Inc or give up 28.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
89bio Inc vs. Fate Therapeutics
Performance |
| Timeline |
| 89bio Inc |
| Fate Therapeutics |
89bio and Fate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 89bio and Fate Therapeutics
The main advantage of trading using opposite 89bio and Fate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 89bio position performs unexpectedly, Fate 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 Fate Therapeutics will offset losses from the drop in Fate Therapeutics' long position.| 89bio vs. Madrigal Pharmaceuticals | 89bio vs. Pliant Therapeutics | 89bio vs. Arcellx | 89bio vs. Stoke Therapeutics |
| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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