Correlation Between Fate Therapeutics and Blueprint Medicines
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and Blueprint Medicines 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 Blueprint Medicines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Blueprint Medicines Corp, you can compare the effects of market volatilities on Fate Therapeutics and Blueprint Medicines 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 Blueprint Medicines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Blueprint Medicines.
Diversification Opportunities for Fate Therapeutics and Blueprint Medicines
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fate and Blueprint is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Blueprint Medicines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueprint Medicines Corp 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 Blueprint Medicines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueprint Medicines Corp has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and Blueprint Medicines go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Blueprint Medicines
Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the Blueprint Medicines. In addition to that, Fate Therapeutics is 2.3 times more volatile than Blueprint Medicines Corp. It trades about -0.01 of its total potential returns per unit of risk. Blueprint Medicines Corp is currently generating about 0.2 per unit of volatility. If you would invest 8,277 in Blueprint Medicines Corp on August 29, 2024 and sell it today you would earn a total of 1,186 from holding Blueprint Medicines Corp or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fate Therapeutics vs. Blueprint Medicines Corp
Performance |
| Timeline |
| Fate Therapeutics |
| Blueprint Medicines Corp |
Fate Therapeutics and Blueprint Medicines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Blueprint Medicines
The main advantage of trading using opposite Fate Therapeutics and Blueprint Medicines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, Blueprint Medicines 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 Blueprint Medicines will offset losses from the drop in Blueprint Medicines' long position.| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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