Correlation Between Frequency Therapeutics and Graphite Bio
Can any of the company-specific risk be diversified away by investing in both Frequency Therapeutics and Graphite Bio 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 Frequency Therapeutics and Graphite Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Therapeutics and Graphite Bio, you can compare the effects of market volatilities on Frequency Therapeutics and Graphite Bio 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 Frequency Therapeutics with a short position of Graphite Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Therapeutics and Graphite Bio.
Diversification Opportunities for Frequency Therapeutics and Graphite Bio
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Frequency and Graphite is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Therapeutics and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite Bio and Frequency 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 Frequency Therapeutics are associated (or correlated) with Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of Frequency Therapeutics i.e., Frequency Therapeutics and Graphite Bio go up and down completely randomly.
Pair Corralation between Frequency Therapeutics and Graphite Bio
Given the investment horizon of 90 days Frequency Therapeutics is expected to generate 5.86 times more return on investment than Graphite Bio. However, Frequency Therapeutics is 5.86 times more volatile than Graphite Bio. It trades about 0.11 of its potential returns per unit of risk. Graphite Bio is currently generating about -0.12 per unit of risk. If you would invest 39.00 in Frequency Therapeutics on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Frequency Therapeutics or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Therapeutics vs. Graphite Bio
Performance |
| Timeline |
| Frequency Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Graphite Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Frequency Therapeutics and Graphite Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Therapeutics and Graphite Bio
The main advantage of trading using opposite Frequency Therapeutics and Graphite Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Therapeutics position performs unexpectedly, Graphite Bio 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 Graphite Bio will offset losses from the drop in Graphite Bio's long position.| Frequency Therapeutics vs. Lineage Cell Therapeutics | Frequency Therapeutics vs. MAIA Biotechnology | Frequency Therapeutics vs. Armata Pharmaceuticals | Frequency Therapeutics vs. Portage Biotech |
| Graphite Bio vs. Assembly Biosciences | Graphite Bio vs. Instil Bio | Graphite Bio vs. Nuvation Bio | Graphite Bio vs. Achilles Therapeutics PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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