Correlation Between Century Therapeutics and Shattuck Labs
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Shattuck Labs 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 Shattuck Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Shattuck Labs, you can compare the effects of market volatilities on Century Therapeutics and Shattuck Labs 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 Shattuck Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Shattuck Labs.
Diversification Opportunities for Century Therapeutics and Shattuck Labs
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Shattuck is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs 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 Shattuck Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shattuck Labs has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Shattuck Labs go up and down completely randomly.
Pair Corralation between Century Therapeutics and Shattuck Labs
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Shattuck Labs. But the stock apears to be less risky and, when comparing its historical volatility, Century Therapeutics is 1.64 times less risky than Shattuck Labs. The stock trades about -0.05 of its potential returns per unit of risk. The Shattuck Labs is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Shattuck Labs on August 28, 2024 and sell it today you would lose (129.00) from holding Shattuck Labs or give up 56.09% 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. Shattuck Labs
Performance |
| Timeline |
| Century Therapeutics |
| Shattuck Labs |
Century Therapeutics and Shattuck Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Shattuck Labs
The main advantage of trading using opposite Century Therapeutics and Shattuck Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Shattuck Labs 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 Shattuck Labs will offset losses from the drop in Shattuck Labs' long position.| Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. Scpharmaceuticals | Century Therapeutics vs. Milestone Pharmaceuticals |
| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Eliem Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa Therapeutics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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