Correlation Between Intellia Therapeutics and Sangamo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Intellia Therapeutics and Sangamo 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 Intellia Therapeutics and Sangamo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intellia Therapeutics and Sangamo Therapeutics, you can compare the effects of market volatilities on Intellia Therapeutics and Sangamo 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 Intellia Therapeutics with a short position of Sangamo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intellia Therapeutics and Sangamo Therapeutics.
Diversification Opportunities for Intellia Therapeutics and Sangamo Therapeutics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intellia and Sangamo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Intellia Therapeutics and Sangamo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangamo Therapeutics and Intellia 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 Intellia Therapeutics are associated (or correlated) with Sangamo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangamo Therapeutics has no effect on the direction of Intellia Therapeutics i.e., Intellia Therapeutics and Sangamo Therapeutics go up and down completely randomly.
Pair Corralation between Intellia Therapeutics and Sangamo Therapeutics
Given the investment horizon of 90 days Intellia Therapeutics is expected to generate 1.35 times more return on investment than Sangamo Therapeutics. However, Intellia Therapeutics is 1.35 times more volatile than Sangamo Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Sangamo Therapeutics is currently generating about 0.11 per unit of risk. If you would invest 950.00 in Intellia Therapeutics on November 18, 2024 and sell it today you would earn a total of 120.00 from holding Intellia Therapeutics or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intellia Therapeutics vs. Sangamo Therapeutics
Performance |
| Timeline |
| Intellia Therapeutics |
| Sangamo Therapeutics |
Intellia Therapeutics and Sangamo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intellia Therapeutics and Sangamo Therapeutics
The main advantage of trading using opposite Intellia Therapeutics and Sangamo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intellia Therapeutics position performs unexpectedly, Sangamo 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 Sangamo Therapeutics will offset losses from the drop in Sangamo Therapeutics' long position.| Intellia Therapeutics vs. Editas Medicine | Intellia Therapeutics vs. Caribou Biosciences | Intellia Therapeutics vs. Crispr Therapeutics AG | Intellia Therapeutics vs. Verve Therapeutics |
| Sangamo Therapeutics vs. Editas Medicine | Sangamo Therapeutics vs. Intellia Therapeutics | Sangamo Therapeutics vs. Bluebird bio | Sangamo Therapeutics vs. Alnylam Pharmaceuticals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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