Correlation Between Magenta Therapeutics and Instil Bio

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Magenta 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 Magenta 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 Magenta Therapeutics and Instil Bio, you can compare the effects of market volatilities on Magenta 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 Magenta Therapeutics with a short position of Instil Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magenta Therapeutics and Instil Bio.

Diversification Opportunities for Magenta Therapeutics and Instil Bio

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Magenta and Instil is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Magenta Therapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio 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 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 Magenta Therapeutics i.e., Magenta Therapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between Magenta Therapeutics and Instil Bio

Given the investment horizon of 90 days Magenta Therapeutics is expected to generate 15.39 times less return on investment than Instil Bio. But when comparing it to its historical volatility, Magenta Therapeutics is 2.22 times less risky than Instil Bio. It trades about 0.01 of its potential returns per unit of risk. Instil Bio is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,600  in Instil Bio on November 2, 2024 and sell it today you would earn a total of  801.00  from holding Instil Bio or generate 50.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy22.67%
ValuesDaily Returns

Magenta Therapeutics  vs.  Instil Bio

 Performance 
       Timeline  
Magenta Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Magenta Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Magenta Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Instil Bio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Instil Bio is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Magenta Therapeutics and Instil Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Magenta Therapeutics and Instil Bio

The main advantage of trading using opposite Magenta Therapeutics and Instil Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magenta 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.
The idea behind Magenta Therapeutics and Instil 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing