Correlation Between Rubius Therapeutics and Magenta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Rubius Therapeutics and Magenta 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 Rubius Therapeutics and Magenta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubius Therapeutics and Magenta Therapeutics, you can compare the effects of market volatilities on Rubius Therapeutics and Magenta 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 Rubius Therapeutics with a short position of Magenta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubius Therapeutics and Magenta Therapeutics.
Diversification Opportunities for Rubius Therapeutics and Magenta Therapeutics
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rubius and Magenta is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Rubius Therapeutics and Magenta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magenta Therapeutics and Rubius 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 Rubius Therapeutics are associated (or correlated) with Magenta Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magenta Therapeutics has no effect on the direction of Rubius Therapeutics i.e., Rubius Therapeutics and Magenta Therapeutics go up and down completely randomly.
Pair Corralation between Rubius Therapeutics and Magenta Therapeutics
Given the investment horizon of 90 days Rubius Therapeutics is expected to under-perform the Magenta Therapeutics. In addition to that, Rubius Therapeutics is 1.89 times more volatile than Magenta Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Magenta Therapeutics is currently generating about 0.0 per unit of volatility. If you would invest 125.00 in Magenta Therapeutics on August 29, 2024 and sell it today you would lose (43.00) from holding Magenta Therapeutics or give up 34.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 38.46% |
| Values | Daily Returns |
Rubius Therapeutics vs. Magenta Therapeutics
Performance |
| Timeline |
| Rubius Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rubius Therapeutics and Magenta Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubius Therapeutics and Magenta Therapeutics
The main advantage of trading using opposite Rubius Therapeutics and Magenta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubius Therapeutics position performs unexpectedly, Magenta 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 Magenta Therapeutics will offset losses from the drop in Magenta Therapeutics' long position.The idea behind Rubius Therapeutics and Magenta Therapeutics 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.| Magenta Therapeutics vs. Assembly Biosciences | Magenta Therapeutics vs. Instil Bio | Magenta Therapeutics vs. Nuvation Bio | Magenta Therapeutics vs. Achilles Therapeutics PLC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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