Correlation Between Generation Bio and CytomX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Generation Bio and CytomX 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 Generation Bio and CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Bio Co and CytomX Therapeutics, you can compare the effects of market volatilities on Generation Bio and CytomX 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 Generation Bio with a short position of CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Bio and CytomX Therapeutics.
Diversification Opportunities for Generation Bio and CytomX Therapeutics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Generation and CytomX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics and Generation Bio 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 Generation Bio Co are associated (or correlated) with CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Generation Bio i.e., Generation Bio and CytomX Therapeutics go up and down completely randomly.
Pair Corralation between Generation Bio and CytomX Therapeutics
Given the investment horizon of 90 days Generation Bio Co is expected to generate 1.17 times more return on investment than CytomX Therapeutics. However, Generation Bio is 1.17 times more volatile than CytomX Therapeutics. It trades about -0.05 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 335.00 in Generation Bio Co on September 3, 2024 and sell it today you would lose (183.00) from holding Generation Bio Co or give up 54.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generation Bio Co vs. CytomX Therapeutics
Performance |
| Timeline |
| Generation Bio |
| CytomX Therapeutics |
Generation Bio and CytomX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Bio and CytomX Therapeutics
The main advantage of trading using opposite Generation Bio and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Bio position performs unexpectedly, CytomX 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 CytomX Therapeutics will offset losses from the drop in CytomX Therapeutics' long position.| Generation Bio vs. Monte Rosa Therapeutics | Generation Bio vs. Nkarta Inc | Generation Bio vs. Lyell Immunopharma | Generation Bio vs. Sana Biotechnology |
| CytomX Therapeutics vs. Spero Therapeutics | CytomX Therapeutics vs. Instil Bio | CytomX Therapeutics vs. NextCure | CytomX Therapeutics vs. Assembly 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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