Correlation Between Century Therapeutics and Instil Bio
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Instil 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 Instil 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 Instil Bio, you can compare the effects of market volatilities on Century Therapeutics and Instil 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 Instil Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Instil Bio.
Diversification Opportunities for Century Therapeutics and Instil Bio
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Century and Instil is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil 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 Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Instil Bio go up and down completely randomly.
Pair Corralation between Century Therapeutics and Instil Bio
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Instil Bio. But the stock apears to be less risky and, when comparing its historical volatility, Century Therapeutics is 1.61 times less risky than Instil Bio. The stock trades about -0.16 of its potential returns per unit of risk. The Instil Bio is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 3,088 in Instil Bio on August 25, 2024 and sell it today you would lose (473.00) from holding Instil Bio or give up 15.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Century Therapeutics vs. Instil Bio
Performance |
| Timeline |
| Century Therapeutics |
| Instil Bio |
Century Therapeutics and Instil Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Instil Bio
The main advantage of trading using opposite Century Therapeutics and Instil Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Instil 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 Instil Bio will offset losses from the drop in Instil Bio's long position.| Century Therapeutics vs. Ikena Oncology | Century Therapeutics vs. Eliem Therapeutics | Century Therapeutics vs. HCW Biologics | Century Therapeutics vs. RenovoRx |
| Instil Bio vs. Ikena Oncology | Instil Bio vs. Eliem Therapeutics | Instil Bio vs. HCW Biologics | Instil Bio vs. RenovoRx |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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