Correlation Between 89bio and Intellia Therapeutics
Can any of the company-specific risk be diversified away by investing in both 89bio and Intellia 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 Intellia 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 Intellia Therapeutics, you can compare the effects of market volatilities on 89bio and Intellia 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 Intellia Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 89bio and Intellia Therapeutics.
Diversification Opportunities for 89bio and Intellia Therapeutics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 89bio and Intellia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding 89bio Inc and Intellia Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellia 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 Intellia Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellia Therapeutics has no effect on the direction of 89bio i.e., 89bio and Intellia Therapeutics go up and down completely randomly.
Pair Corralation between 89bio and Intellia Therapeutics
Given the investment horizon of 90 days 89bio Inc is expected to generate 1.23 times more return on investment than Intellia Therapeutics. However, 89bio is 1.23 times more volatile than Intellia Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Intellia Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 847.00 in 89bio Inc on August 30, 2024 and sell it today you would earn a total of 67.00 from holding 89bio Inc or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
89bio Inc vs. Intellia Therapeutics
Performance |
| Timeline |
| 89bio Inc |
| Intellia Therapeutics |
89bio and Intellia Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 89bio and Intellia Therapeutics
The main advantage of trading using opposite 89bio and Intellia Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 89bio position performs unexpectedly, Intellia 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 Intellia Therapeutics will offset losses from the drop in Intellia Therapeutics' long position.The idea behind 89bio Inc and Intellia Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Intellia Therapeutics vs. Editas Medicine | Intellia Therapeutics vs. Caribou Biosciences | Intellia Therapeutics vs. Crispr Therapeutics AG | Intellia 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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