Correlation Between Innovent Biologics and Graphite Bio
Can any of the company-specific risk be diversified away by investing in both Innovent Biologics and Graphite 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 Innovent Biologics and Graphite Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovent Biologics and Graphite Bio, you can compare the effects of market volatilities on Innovent Biologics and Graphite 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 Innovent Biologics with a short position of Graphite Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovent Biologics and Graphite Bio.
Diversification Opportunities for Innovent Biologics and Graphite Bio
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovent and Graphite is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Innovent Biologics and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite Bio and Innovent Biologics 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 Innovent Biologics are associated (or correlated) with Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of Innovent Biologics i.e., Innovent Biologics and Graphite Bio go up and down completely randomly.
Pair Corralation between Innovent Biologics and Graphite Bio
If you would invest 267.00 in Graphite Bio on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Graphite Bio or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Innovent Biologics vs. Graphite Bio
Performance |
| Timeline |
| Innovent Biologics |
| Graphite Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Innovent Biologics and Graphite Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovent Biologics and Graphite Bio
The main advantage of trading using opposite Innovent Biologics and Graphite Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovent Biologics position performs unexpectedly, Graphite 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 Graphite Bio will offset losses from the drop in Graphite Bio's long position.The idea behind Innovent Biologics and Graphite Bio pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Graphite Bio vs. Assembly Biosciences | Graphite Bio vs. Instil Bio | Graphite Bio vs. Nuvation Bio | Graphite Bio vs. Achilles Therapeutics PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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