Correlation Between Century Therapeutics and Gracell Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Gracell Biotechnologies 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 Gracell Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Gracell Biotechnologies, you can compare the effects of market volatilities on Century Therapeutics and Gracell Biotechnologies 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 Gracell Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Gracell Biotechnologies.
Diversification Opportunities for Century Therapeutics and Gracell Biotechnologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Gracell is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Gracell Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gracell Biotechnologies 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 Gracell Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gracell Biotechnologies has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Gracell Biotechnologies go up and down completely randomly.
Pair Corralation between Century Therapeutics and Gracell Biotechnologies
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Gracell Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Century Therapeutics is 1.25 times less risky than Gracell Biotechnologies. The stock trades about -0.05 of its potential returns per unit of risk. The Gracell Biotechnologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 263.00 in Gracell Biotechnologies on August 28, 2024 and sell it today you would earn a total of 139.00 from holding Gracell Biotechnologies or generate 52.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Century Therapeutics vs. Gracell Biotechnologies
Performance |
| Timeline |
| Century Therapeutics |
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Century Therapeutics and Gracell Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Gracell Biotechnologies
The main advantage of trading using opposite Century Therapeutics and Gracell Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Gracell Biotechnologies 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 Gracell Biotechnologies will offset losses from the drop in Gracell Biotechnologies' long position.| Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. Scpharmaceuticals | Century Therapeutics vs. Milestone Pharmaceuticals |
| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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