Correlation Between Frequency Therapeutics and Aurinia Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Frequency Therapeutics and Aurinia Pharmaceuticals 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 Frequency Therapeutics and Aurinia Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Therapeutics and Aurinia Pharmaceuticals, you can compare the effects of market volatilities on Frequency Therapeutics and Aurinia Pharmaceuticals 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 Frequency Therapeutics with a short position of Aurinia Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Therapeutics and Aurinia Pharmaceuticals.
Diversification Opportunities for Frequency Therapeutics and Aurinia Pharmaceuticals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Frequency and Aurinia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Therapeutics and Aurinia Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurinia Pharmaceuticals and Frequency 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 Frequency Therapeutics are associated (or correlated) with Aurinia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurinia Pharmaceuticals has no effect on the direction of Frequency Therapeutics i.e., Frequency Therapeutics and Aurinia Pharmaceuticals go up and down completely randomly.
Pair Corralation between Frequency Therapeutics and Aurinia Pharmaceuticals
Given the investment horizon of 90 days Frequency Therapeutics is expected to under-perform the Aurinia Pharmaceuticals. In addition to that, Frequency Therapeutics is 1.7 times more volatile than Aurinia Pharmaceuticals. It trades about -0.22 of its total potential returns per unit of risk. Aurinia Pharmaceuticals is currently generating about -0.19 per unit of volatility. If you would invest 877.00 in Aurinia Pharmaceuticals on November 3, 2024 and sell it today you would lose (77.00) from holding Aurinia Pharmaceuticals or give up 8.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Therapeutics vs. Aurinia Pharmaceuticals
Performance |
| Timeline |
| Frequency Therapeutics |
| Aurinia Pharmaceuticals |
Frequency Therapeutics and Aurinia Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Therapeutics and Aurinia Pharmaceuticals
The main advantage of trading using opposite Frequency Therapeutics and Aurinia Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Therapeutics position performs unexpectedly, Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals will offset losses from the drop in Aurinia Pharmaceuticals' long position.| Frequency Therapeutics vs. Modine Manufacturing | Frequency Therapeutics vs. Arrow Electronics | Frequency Therapeutics vs. Lucid Group | Frequency Therapeutics vs. Alvotech |
| Aurinia Pharmaceuticals vs. Viking Therapeutics | Aurinia Pharmaceuticals vs. Axsome Therapeutics | Aurinia Pharmaceuticals vs. Madrigal Pharmaceuticals | Aurinia Pharmaceuticals vs. Seres 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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