Correlation Between Century Therapeutics and Biodesix
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Biodesix 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 Biodesix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Biodesix, you can compare the effects of market volatilities on Century Therapeutics and Biodesix 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 Biodesix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Biodesix.
Diversification Opportunities for Century Therapeutics and Biodesix
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Biodesix is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix 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 Biodesix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodesix has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Biodesix go up and down completely randomly.
Pair Corralation between Century Therapeutics and Biodesix
Given the investment horizon of 90 days Century Therapeutics is expected to generate 0.79 times more return on investment than Biodesix. However, Century Therapeutics is 1.27 times less risky than Biodesix. It trades about -0.05 of its potential returns per unit of risk. Biodesix is currently generating about -0.11 per unit of risk. If you would invest 140.00 in Century Therapeutics on August 28, 2024 and sell it today you would lose (10.00) from holding Century Therapeutics or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Biodesix
Performance |
| Timeline |
| Century Therapeutics |
| Biodesix |
Century Therapeutics and Biodesix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Biodesix
The main advantage of trading using opposite Century Therapeutics and Biodesix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Biodesix 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 Biodesix will offset losses from the drop in Biodesix's long position.| Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. Scpharmaceuticals | Century Therapeutics vs. Milestone Pharmaceuticals |
| Biodesix vs. Aclaris Therapeutics | Biodesix vs. Castle Biosciences | Biodesix vs. Prenetics Global | Biodesix vs. DarioHealth Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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