Correlation Between Fortrea Holdings and Precigen
Can any of the company-specific risk be diversified away by investing in both Fortrea Holdings and Precigen 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 Fortrea Holdings and Precigen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortrea Holdings and Precigen, you can compare the effects of market volatilities on Fortrea Holdings and Precigen 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 Fortrea Holdings with a short position of Precigen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortrea Holdings and Precigen.
Diversification Opportunities for Fortrea Holdings and Precigen
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortrea and Precigen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fortrea Holdings and Precigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precigen and Fortrea Holdings 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 Fortrea Holdings are associated (or correlated) with Precigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precigen has no effect on the direction of Fortrea Holdings i.e., Fortrea Holdings and Precigen go up and down completely randomly.
Pair Corralation between Fortrea Holdings and Precigen
Given the investment horizon of 90 days Fortrea Holdings is expected to under-perform the Precigen. But the stock apears to be less risky and, when comparing its historical volatility, Fortrea Holdings is 1.47 times less risky than Precigen. The stock trades about -0.01 of its potential returns per unit of risk. The Precigen is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Precigen on August 31, 2024 and sell it today you would lose (70.00) from holding Precigen or give up 43.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 74.14% |
| Values | Daily Returns |
Fortrea Holdings vs. Precigen
Performance |
| Timeline |
| Fortrea Holdings |
| Precigen |
Fortrea Holdings and Precigen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortrea Holdings and Precigen
The main advantage of trading using opposite Fortrea Holdings and Precigen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortrea Holdings position performs unexpectedly, Precigen 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 Precigen will offset losses from the drop in Precigen's long position.| Fortrea Holdings vs. MACOM Technology Solutions | Fortrea Holdings vs. Electrovaya Common Shares | Fortrea Holdings vs. Supercom | Fortrea Holdings vs. Globalfoundries |
| Precigen vs. CorMedix | Precigen vs. Sangamo Therapeutics | Precigen vs. Aptose Biosciences | Precigen vs. Corvus Pharmaceuticals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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