Correlation Between Ikena Oncology and Century Therapeutics
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and Century 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 Ikena Oncology and Century Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and Century Therapeutics, you can compare the effects of market volatilities on Ikena Oncology and Century 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 Ikena Oncology with a short position of Century Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and Century Therapeutics.
Diversification Opportunities for Ikena Oncology and Century Therapeutics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ikena and Century is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Century Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Therapeutics and Ikena Oncology 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 Ikena Oncology are associated (or correlated) with Century Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Therapeutics has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and Century Therapeutics go up and down completely randomly.
Pair Corralation between Ikena Oncology and Century Therapeutics
Given the investment horizon of 90 days Ikena Oncology is expected to generate 1.03 times more return on investment than Century Therapeutics. However, Ikena Oncology is 1.03 times more volatile than Century Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Century Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 422.00 in Ikena Oncology on November 1, 2024 and sell it today you would lose (272.00) from holding Ikena Oncology or give up 64.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ikena Oncology vs. Century Therapeutics
Performance |
| Timeline |
| Ikena Oncology |
| Century Therapeutics |
Ikena Oncology and Century Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikena Oncology and Century Therapeutics
The main advantage of trading using opposite Ikena Oncology and Century Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, Century 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 Century Therapeutics will offset losses from the drop in Century Therapeutics' long position.| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Monte Rosa Therapeutics |
| Century Therapeutics vs. Edgewise Therapeutics | Century Therapeutics vs. C4 Therapeutics | Century Therapeutics vs. Mineralys Therapeutics, Common | Century Therapeutics vs. Cullinan Oncology LLC |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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