Correlation Between Century Therapeutics and Exscientia
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Exscientia 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 Exscientia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Exscientia Ltd ADR, you can compare the effects of market volatilities on Century Therapeutics and Exscientia 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 Exscientia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Exscientia.
Diversification Opportunities for Century Therapeutics and Exscientia
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Century and Exscientia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Exscientia Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exscientia ADR 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 Exscientia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exscientia ADR has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Exscientia go up and down completely randomly.
Pair Corralation between Century Therapeutics and Exscientia
Given the investment horizon of 90 days Century Therapeutics is expected to generate 1.08 times more return on investment than Exscientia. However, Century Therapeutics is 1.08 times more volatile than Exscientia Ltd ADR. It trades about -0.01 of its potential returns per unit of risk. Exscientia Ltd ADR is currently generating about -0.07 per unit of risk. If you would invest 140.00 in Century Therapeutics on August 29, 2024 and sell it today you would lose (5.00) from holding Century Therapeutics or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Century Therapeutics vs. Exscientia Ltd ADR
Performance |
| Timeline |
| Century Therapeutics |
| Exscientia ADR |
Century Therapeutics and Exscientia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Exscientia
The main advantage of trading using opposite Century Therapeutics and Exscientia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Exscientia 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 Exscientia will offset losses from the drop in Exscientia's 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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