Correlation Between Puma Biotechnology and Century Therapeutics
Can any of the company-specific risk be diversified away by investing in both Puma Biotechnology and Century 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 Puma Biotechnology and Century Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Biotechnology and Century Therapeutics, you can compare the effects of market volatilities on Puma Biotechnology and Century 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 Puma Biotechnology with a short position of Century Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Biotechnology and Century Therapeutics.
Diversification Opportunities for Puma Biotechnology and Century Therapeutics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puma and Century is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Puma Biotechnology and Century Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Therapeutics and Puma Biotechnology 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 Puma Biotechnology are associated (or correlated) with Century Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Therapeutics has no effect on the direction of Puma Biotechnology i.e., Puma Biotechnology and Century Therapeutics go up and down completely randomly.
Pair Corralation between Puma Biotechnology and Century Therapeutics
Given the investment horizon of 90 days Puma Biotechnology is expected to generate 21.16 times less return on investment than Century Therapeutics. But when comparing it to its historical volatility, Puma Biotechnology is 1.05 times less risky than Century Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Century Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Century Therapeutics on September 15, 2024 and sell it today you would lose (1.00) from holding Century Therapeutics or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puma Biotechnology vs. Century Therapeutics
Performance |
| Timeline |
| Puma Biotechnology |
| Century Therapeutics |
Puma Biotechnology and Century Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Biotechnology and Century Therapeutics
The main advantage of trading using opposite Puma Biotechnology and Century Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Biotechnology position performs unexpectedly, Century 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 Century Therapeutics will offset losses from the drop in Century Therapeutics' long position.| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
| Century Therapeutics vs. Puma Biotechnology | Century Therapeutics vs. Iovance Biotherapeutics | Century Therapeutics vs. Day One Biopharmaceuticals | Century Therapeutics vs. Inozyme Pharma |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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