Correlation Between Fate Therapeutics and Pliant Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fate Therapeutics and Pliant 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 Pliant 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 Pliant Therapeutics, you can compare the effects of market volatilities on Fate Therapeutics and Pliant 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 Pliant Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fate Therapeutics and Pliant Therapeutics.
Diversification Opportunities for Fate Therapeutics and Pliant Therapeutics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fate and Pliant is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and Pliant Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pliant 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 Pliant Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pliant Therapeutics has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and Pliant Therapeutics go up and down completely randomly.
Pair Corralation between Fate Therapeutics and Pliant Therapeutics
Given the investment horizon of 90 days Fate Therapeutics is expected to generate 2.71 times more return on investment than Pliant Therapeutics. However, Fate Therapeutics is 2.71 times more volatile than Pliant Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Pliant Therapeutics is currently generating about -0.11 per unit of risk. If you would invest 272.00 in Fate Therapeutics on August 30, 2024 and sell it today you would earn a total of 45.00 from holding Fate Therapeutics or generate 16.54% 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. Pliant Therapeutics
Performance |
| Timeline |
| Fate Therapeutics |
| Pliant Therapeutics |
Fate Therapeutics and Pliant Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fate Therapeutics and Pliant Therapeutics
The main advantage of trading using opposite Fate Therapeutics and Pliant Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fate Therapeutics position performs unexpectedly, Pliant 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 Pliant Therapeutics will offset losses from the drop in Pliant Therapeutics' long position.| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus Biosciences |
| Pliant Therapeutics vs. Ikena Oncology | Pliant Therapeutics vs. Eliem Therapeutics | Pliant Therapeutics vs. HCW Biologics | Pliant Therapeutics vs. RenovoRx |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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