Correlation Between Gracell Biotechnologies and Terns Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Gracell Biotechnologies and Terns Pharmaceuticals 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 Terns Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gracell Biotechnologies and Terns Pharmaceuticals, you can compare the effects of market volatilities on Gracell Biotechnologies and Terns Pharmaceuticals 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 Terns Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gracell Biotechnologies and Terns Pharmaceuticals.
Diversification Opportunities for Gracell Biotechnologies and Terns Pharmaceuticals
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gracell and Terns is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gracell Biotechnologies and Terns Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terns Pharmaceuticals 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 Terns Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terns Pharmaceuticals has no effect on the direction of Gracell Biotechnologies i.e., Gracell Biotechnologies and Terns Pharmaceuticals go up and down completely randomly.
Pair Corralation between Gracell Biotechnologies and Terns Pharmaceuticals
Given the investment horizon of 90 days Gracell Biotechnologies is expected to generate 1.9 times more return on investment than Terns Pharmaceuticals. However, Gracell Biotechnologies is 1.9 times more volatile than Terns Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Terns Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest 393.00 in Gracell Biotechnologies on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Gracell Biotechnologies or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Gracell Biotechnologies vs. Terns Pharmaceuticals
Performance |
| Timeline |
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Terns Pharmaceuticals |
Gracell Biotechnologies and Terns Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gracell Biotechnologies and Terns Pharmaceuticals
The main advantage of trading using opposite Gracell Biotechnologies and Terns Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gracell Biotechnologies position performs unexpectedly, Terns Pharmaceuticals 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 Terns Pharmaceuticals will offset losses from the drop in Terns Pharmaceuticals' long position.| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
| Terns Pharmaceuticals vs. Amylyx Pharmaceuticals | Terns Pharmaceuticals vs. Acumen Pharmaceuticals | Terns Pharmaceuticals vs. Inozyme Pharma | Terns Pharmaceuticals vs. X4 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |