Correlation Between Neoleukin Therapeutics and Gracell Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Neoleukin Therapeutics and Gracell Biotechnologies 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 Neoleukin Therapeutics and Gracell Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neoleukin Therapeutics and Gracell Biotechnologies, you can compare the effects of market volatilities on Neoleukin Therapeutics and Gracell Biotechnologies 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 Neoleukin Therapeutics with a short position of Gracell Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoleukin Therapeutics and Gracell Biotechnologies.
Diversification Opportunities for Neoleukin Therapeutics and Gracell Biotechnologies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Neoleukin and Gracell is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Neoleukin Therapeutics and Gracell Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gracell Biotechnologies and Neoleukin 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 Neoleukin Therapeutics are associated (or correlated) with Gracell Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gracell Biotechnologies has no effect on the direction of Neoleukin Therapeutics i.e., Neoleukin Therapeutics and Gracell Biotechnologies go up and down completely randomly.
Pair Corralation between Neoleukin Therapeutics and Gracell Biotechnologies
Given the investment horizon of 90 days Neoleukin Therapeutics is expected to under-perform the Gracell Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Neoleukin Therapeutics is 2.25 times less risky than Gracell Biotechnologies. The stock trades about -0.1 of its potential returns per unit of risk. The Gracell Biotechnologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 203.00 in Gracell Biotechnologies on August 29, 2024 and sell it today you would earn a total of 199.00 from holding Gracell Biotechnologies or generate 98.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neoleukin Therapeutics vs. Gracell Biotechnologies
Performance |
| Timeline |
| Neoleukin Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Neoleukin Therapeutics and Gracell Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoleukin Therapeutics and Gracell Biotechnologies
The main advantage of trading using opposite Neoleukin Therapeutics and Gracell Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoleukin Therapeutics position performs unexpectedly, Gracell Biotechnologies 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 Gracell Biotechnologies will offset losses from the drop in Gracell Biotechnologies' long position.| Neoleukin Therapeutics vs. CytomX Therapeutics | Neoleukin Therapeutics vs. Spero Therapeutics | Neoleukin Therapeutics vs. Instil Bio | Neoleukin Therapeutics vs. NextCure |
| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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