Correlation Between Century Therapeutics and Atara Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Atara Biotherapeutics 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 Atara Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Atara Biotherapeutics, you can compare the effects of market volatilities on Century Therapeutics and Atara Biotherapeutics 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 Atara Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Atara Biotherapeutics.
Diversification Opportunities for Century Therapeutics and Atara Biotherapeutics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Atara is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Atara Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atara Biotherapeutics 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 Atara Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atara Biotherapeutics has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Atara Biotherapeutics go up and down completely randomly.
Pair Corralation between Century Therapeutics and Atara Biotherapeutics
Given the investment horizon of 90 days Century Therapeutics is expected to generate 0.74 times more return on investment than Atara Biotherapeutics. However, Century Therapeutics is 1.34 times less risky than Atara Biotherapeutics. It trades about 0.23 of its potential returns per unit of risk. Atara Biotherapeutics is currently generating about 0.16 per unit of risk. If you would invest 128.00 in Century Therapeutics on August 31, 2024 and sell it today you would earn a total of 44.00 from holding Century Therapeutics or generate 34.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Atara Biotherapeutics
Performance |
| Timeline |
| Century Therapeutics |
| Atara Biotherapeutics |
Century Therapeutics and Atara Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Atara Biotherapeutics
The main advantage of trading using opposite Century Therapeutics and Atara Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Atara Biotherapeutics 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 Atara Biotherapeutics will offset losses from the drop in Atara Biotherapeutics' long position.| Century Therapeutics vs. Edgewise Therapeutics | Century Therapeutics vs. C4 Therapeutics | Century Therapeutics vs. Mineralys Therapeutics, Common | Century Therapeutics vs. Cullinan Oncology LLC |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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