Correlation Between Passage Bio and BOS Better
Can any of the company-specific risk be diversified away by investing in both Passage Bio and BOS Better 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 Passage Bio and BOS Better into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Passage Bio and BOS Better Online, you can compare the effects of market volatilities on Passage Bio and BOS Better 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 Passage Bio with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passage Bio and BOS Better.
Diversification Opportunities for Passage Bio and BOS Better
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Passage and BOS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online and Passage Bio 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 Passage Bio are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Passage Bio i.e., Passage Bio and BOS Better go up and down completely randomly.
Pair Corralation between Passage Bio and BOS Better
Given the investment horizon of 90 days Passage Bio is expected to generate 14.29 times more return on investment than BOS Better. However, Passage Bio is 14.29 times more volatile than BOS Better Online. It trades about 0.15 of its potential returns per unit of risk. BOS Better Online is currently generating about 0.4 per unit of risk. If you would invest 58.00 in Passage Bio on September 14, 2024 and sell it today you would earn a total of 20.00 from holding Passage Bio or generate 34.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Passage Bio vs. BOS Better Online
Performance |
| Timeline |
| Passage Bio |
| BOS Better Online |
Passage Bio and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Passage Bio and BOS Better
The main advantage of trading using opposite Passage Bio and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Passage Bio position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
| BOS Better vs. Passage Bio | BOS Better vs. Black Diamond Therapeutics | BOS Better vs. Alector | BOS Better vs. Century 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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