Correlation Between Gracell Biotechnologies and Revolution Medicines
Can any of the company-specific risk be diversified away by investing in both Gracell Biotechnologies and Revolution Medicines 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 Gracell Biotechnologies and Revolution Medicines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gracell Biotechnologies and Revolution Medicines, you can compare the effects of market volatilities on Gracell Biotechnologies and Revolution Medicines 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 Gracell Biotechnologies with a short position of Revolution Medicines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gracell Biotechnologies and Revolution Medicines.
Diversification Opportunities for Gracell Biotechnologies and Revolution Medicines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gracell and Revolution is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gracell Biotechnologies and Revolution Medicines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Medicines and Gracell Biotechnologies 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 Gracell Biotechnologies are associated (or correlated) with Revolution Medicines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Medicines has no effect on the direction of Gracell Biotechnologies i.e., Gracell Biotechnologies and Revolution Medicines go up and down completely randomly.
Pair Corralation between Gracell Biotechnologies and Revolution Medicines
Given the investment horizon of 90 days Gracell Biotechnologies is expected to generate 1.73 times more return on investment than Revolution Medicines. However, Gracell Biotechnologies is 1.73 times more volatile than Revolution Medicines. It trades about 0.06 of its potential returns per unit of risk. Revolution Medicines is currently generating about 0.06 per unit of risk. If you would invest 287.00 in Gracell Biotechnologies on August 26, 2024 and sell it today you would earn a total of 115.00 from holding Gracell Biotechnologies or generate 40.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.99% |
| Values | Daily Returns |
Gracell Biotechnologies vs. Revolution Medicines
Performance |
| Timeline |
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Revolution Medicines |
Gracell Biotechnologies and Revolution Medicines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gracell Biotechnologies and Revolution Medicines
The main advantage of trading using opposite Gracell Biotechnologies and Revolution Medicines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gracell Biotechnologies position performs unexpectedly, Revolution Medicines 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 Revolution Medicines will offset losses from the drop in Revolution Medicines' long position.| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
| Revolution Medicines vs. Eliem Therapeutics | Revolution Medicines vs. HCW Biologics | Revolution Medicines vs. Scpharmaceuticals | Revolution Medicines vs. Milestone 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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