Correlation Between Fate Therapeutics and Allogene Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and Allogene 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 Fate Therapeutics and Allogene Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Allogene Therapeutics, you can compare the effects of market volatilities on Fate Therapeutics and Allogene 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 Fate Therapeutics with a short position of Allogene Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Allogene Therapeutics.
Diversification Opportunities for Fate Therapeutics and Allogene Therapeutics
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fate and Allogene is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Allogene Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allogene Therapeutics and Fate Therapeutics 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 Fate Therapeutics are associated (or correlated) with Allogene Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allogene Therapeutics has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and Allogene Therapeutics go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Allogene Therapeutics
Given the investment horizon of 90 days Fate Therapeutics is expected to generate 1.25 times more return on investment than Allogene Therapeutics. However, Fate Therapeutics is 1.25 times more volatile than Allogene Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Allogene Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 287.00 in Fate Therapeutics on August 29, 2024 and sell it today you would lose (19.00) from holding Fate Therapeutics or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fate Therapeutics vs. Allogene Therapeutics
Performance |
| Timeline |
| Fate Therapeutics |
| Allogene Therapeutics |
Fate Therapeutics and Allogene Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Allogene Therapeutics
The main advantage of trading using opposite Fate Therapeutics and Allogene Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, Allogene 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 Allogene Therapeutics will offset losses from the drop in Allogene Therapeutics' long position.| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
| Allogene Therapeutics vs. Heron Therapeuti | Allogene Therapeutics vs. Annexon | Allogene Therapeutics vs. Sangamo Therapeutics | Allogene Therapeutics vs. Beam 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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