Correlation Between Century Therapeutics and Passage Bio
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Passage Bio 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 Passage Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Passage Bio, you can compare the effects of market volatilities on Century Therapeutics and Passage Bio 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 Passage Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Passage Bio.
Diversification Opportunities for Century Therapeutics and Passage Bio
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Century and Passage is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio 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 Passage Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passage Bio has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Passage Bio go up and down completely randomly.
Pair Corralation between Century Therapeutics and Passage Bio
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Passage Bio. But the stock apears to be less risky and, when comparing its historical volatility, Century Therapeutics is 2.16 times less risky than Passage Bio. The stock trades about -0.11 of its potential returns per unit of risk. The Passage Bio is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Passage Bio on November 2, 2024 and sell it today you would lose (8.00) from holding Passage Bio or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Passage Bio
Performance |
| Timeline |
| Century Therapeutics |
| Passage Bio |
Century Therapeutics and Passage Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Passage Bio
The main advantage of trading using opposite Century Therapeutics and Passage Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Passage Bio 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 Passage Bio will offset losses from the drop in Passage Bio'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 |
| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |