Correlation Between Magenta Therapeutics and Bicycle Therapeutics
Can any of the company-specific risk be diversified away by investing in both Magenta Therapeutics and Bicycle Therapeutics 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 Magenta Therapeutics and Bicycle Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magenta Therapeutics and Bicycle Therapeutics, you can compare the effects of market volatilities on Magenta Therapeutics and Bicycle Therapeutics 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 Magenta Therapeutics with a short position of Bicycle Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magenta Therapeutics and Bicycle Therapeutics.
Diversification Opportunities for Magenta Therapeutics and Bicycle Therapeutics
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magenta and Bicycle is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Magenta Therapeutics and Bicycle Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicycle Therapeutics and Magenta 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 Magenta Therapeutics are associated (or correlated) with Bicycle Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bicycle Therapeutics has no effect on the direction of Magenta Therapeutics i.e., Magenta Therapeutics and Bicycle Therapeutics go up and down completely randomly.
Pair Corralation between Magenta Therapeutics and Bicycle Therapeutics
If you would invest 82.00 in Magenta Therapeutics on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Magenta Therapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Magenta Therapeutics vs. Bicycle Therapeutics
Performance |
| Timeline |
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bicycle Therapeutics |
Magenta Therapeutics and Bicycle Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magenta Therapeutics and Bicycle Therapeutics
The main advantage of trading using opposite Magenta Therapeutics and Bicycle Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magenta Therapeutics position performs unexpectedly, Bicycle Therapeutics 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 Bicycle Therapeutics will offset losses from the drop in Bicycle Therapeutics' long position.| Magenta Therapeutics vs. Assembly Biosciences | Magenta Therapeutics vs. Instil Bio | Magenta Therapeutics vs. Nuvation Bio | Magenta Therapeutics vs. Achilles Therapeutics PLC |
| Bicycle Therapeutics vs. Candel Therapeutics | Bicycle Therapeutics vs. Cingulate Warrants | Bicycle Therapeutics vs. Unicycive Therapeutics | Bicycle Therapeutics vs. Cardio Diagnostics Holdings |
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.
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