Correlation Between Fate Therapeutics and Beam Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics 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 Fate Therapeutics and Beam 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 Beam Therapeutics, you can compare the effects of market volatilities on Fate Therapeutics 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 Fate Therapeutics with a short position of Beam Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Beam Therapeutics.
Diversification Opportunities for Fate Therapeutics and Beam Therapeutics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fate and Beam is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Beam Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beam 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 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 Fate Therapeutics i.e., Fate Therapeutics and Beam Therapeutics go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Beam Therapeutics
Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the Beam Therapeutics. In addition to that, Fate Therapeutics is 1.25 times more volatile than Beam Therapeutics. It trades about -0.12 of its total potential returns per unit of risk. Beam Therapeutics is currently generating about 0.13 per unit of volatility. If you would invest 2,235 in Beam Therapeutics on August 27, 2024 and sell it today you would earn a total of 270.00 from holding Beam Therapeutics or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fate Therapeutics vs. Beam Therapeutics
Performance |
| Timeline |
| Fate Therapeutics |
| Beam Therapeutics |
Fate Therapeutics and Beam Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Beam Therapeutics
The main advantage of trading using opposite Fate Therapeutics and Beam Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics 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.| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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