Correlation Between Century Therapeutics and Assembly Biosciences
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Assembly Biosciences 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 Century Therapeutics and Assembly Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Assembly Biosciences, you can compare the effects of market volatilities on Century Therapeutics and Assembly Biosciences 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 Century Therapeutics with a short position of Assembly Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Assembly Biosciences.
Diversification Opportunities for Century Therapeutics and Assembly Biosciences
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Century and Assembly is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences and Century Therapeutics 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 Century Therapeutics are associated (or correlated) with Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Assembly Biosciences go up and down completely randomly.
Pair Corralation between Century Therapeutics and Assembly Biosciences
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Assembly Biosciences. In addition to that, Century Therapeutics is 1.72 times more volatile than Assembly Biosciences. It trades about -0.16 of its total potential returns per unit of risk. Assembly Biosciences is currently generating about -0.18 per unit of volatility. If you would invest 1,693 in Assembly Biosciences on August 25, 2024 and sell it today you would lose (189.00) from holding Assembly Biosciences or give up 11.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Century Therapeutics vs. Assembly Biosciences
Performance |
| Timeline |
| Century Therapeutics |
| Assembly Biosciences |
Century Therapeutics and Assembly Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Assembly Biosciences
The main advantage of trading using opposite Century Therapeutics and Assembly Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Assembly Biosciences 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 Assembly Biosciences will offset losses from the drop in Assembly Biosciences' long position.| Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. RenovoRx | Century Therapeutics vs. Tempest Therapeutics |
| Assembly Biosciences vs. Eliem Therapeutics | Assembly Biosciences vs. HCW Biologics | Assembly Biosciences vs. RenovoRx | Assembly Biosciences vs. Tempest Therapeutics |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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