Correlation Between Fate Therapeutics and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fate Therapeutics and Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Fate Therapeutics and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Centessa Pharmaceuticals.
Diversification Opportunities for Fate Therapeutics and Centessa Pharmaceuticals
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fate and Centessa is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Centessa Pharmaceuticals
Given the investment horizon of 90 days Fate Therapeutics is expected to under-perform the Centessa Pharmaceuticals. In addition to that, Fate Therapeutics is 1.44 times more volatile than Centessa Pharmaceuticals PLC. It trades about -0.23 of its total potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about -0.09 per unit of volatility. If you would invest 1,687 in Centessa Pharmaceuticals PLC on October 13, 2024 and sell it today you would lose (123.00) from holding Centessa Pharmaceuticals PLC or give up 7.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fate Therapeutics vs. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| Fate Therapeutics |
| Centessa Pharmaceuticals |
Fate Therapeutics and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Centessa Pharmaceuticals
The main advantage of trading using opposite Fate Therapeutics and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |