Correlation Between Homology Medicines and Bicycle Therapeutics
Can any of the company-specific risk be diversified away by investing in both Homology Medicines and Bicycle 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 Homology Medicines and Bicycle Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homology Medicines and Bicycle Therapeutics, you can compare the effects of market volatilities on Homology Medicines and Bicycle 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 Homology Medicines with a short position of Bicycle Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homology Medicines and Bicycle Therapeutics.
Diversification Opportunities for Homology Medicines and Bicycle Therapeutics
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Homology and Bicycle is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Homology Medicines and Bicycle Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicycle Therapeutics and Homology Medicines 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 Homology Medicines are associated (or correlated) with Bicycle Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bicycle Therapeutics has no effect on the direction of Homology Medicines i.e., Homology Medicines and Bicycle Therapeutics go up and down completely randomly.
Pair Corralation between Homology Medicines and Bicycle Therapeutics
Given the investment horizon of 90 days Homology Medicines is expected to generate 1.17 times more return on investment than Bicycle Therapeutics. However, Homology Medicines is 1.17 times more volatile than Bicycle Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Bicycle Therapeutics is currently generating about 0.0 per unit of risk. If you would invest 110.00 in Homology Medicines on August 31, 2024 and sell it today you would lose (1.00) from holding Homology Medicines or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Homology Medicines vs. Bicycle Therapeutics
Performance |
| Timeline |
| Homology Medicines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bicycle Therapeutics |
Homology Medicines and Bicycle Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homology Medicines and Bicycle Therapeutics
The main advantage of trading using opposite Homology Medicines and Bicycle Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homology Medicines position performs unexpectedly, Bicycle 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 Bicycle Therapeutics will offset losses from the drop in Bicycle Therapeutics' long position.| Homology Medicines vs. Passage Bio | Homology Medicines vs. Stoke Therapeutics | Homology Medicines vs. Adaptimmune Therapeutics Plc | Homology Medicines vs. Black Diamond Therapeutics |
| Bicycle Therapeutics vs. Ideaya Biosciences | Bicycle Therapeutics vs. AnaptysBio | Bicycle Therapeutics vs. MeiraGTx Holdings PLC | Bicycle Therapeutics vs. Keros 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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