Correlation Between Sangamo Therapeutics and Protara Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sangamo Therapeutics and Protara 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 Sangamo Therapeutics and Protara Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangamo Therapeutics and Protara Therapeutics, you can compare the effects of market volatilities on Sangamo Therapeutics and Protara 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 Sangamo Therapeutics with a short position of Protara Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangamo Therapeutics and Protara Therapeutics.
Diversification Opportunities for Sangamo Therapeutics and Protara Therapeutics
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sangamo and Protara is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sangamo Therapeutics and Protara Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protara Therapeutics and Sangamo 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 Sangamo Therapeutics are associated (or correlated) with Protara Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protara Therapeutics has no effect on the direction of Sangamo Therapeutics i.e., Sangamo Therapeutics and Protara Therapeutics go up and down completely randomly.
Pair Corralation between Sangamo Therapeutics and Protara Therapeutics
Given the investment horizon of 90 days Sangamo Therapeutics is expected to generate 0.98 times more return on investment than Protara Therapeutics. However, Sangamo Therapeutics is 1.02 times less risky than Protara Therapeutics. It trades about -0.13 of its potential returns per unit of risk. Protara Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 113.00 in Sangamo Therapeutics on November 27, 2024 and sell it today you would lose (13.00) from holding Sangamo Therapeutics or give up 11.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangamo Therapeutics vs. Protara Therapeutics
Performance |
| Timeline |
| Sangamo Therapeutics |
| Protara Therapeutics |
Sangamo Therapeutics and Protara Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangamo Therapeutics and Protara Therapeutics
The main advantage of trading using opposite Sangamo Therapeutics and Protara Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangamo Therapeutics position performs unexpectedly, Protara 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 Protara Therapeutics will offset losses from the drop in Protara Therapeutics' long position.| Sangamo Therapeutics vs. Editas Medicine | Sangamo Therapeutics vs. Intellia Therapeutics | Sangamo Therapeutics vs. Bluebird bio | Sangamo Therapeutics vs. Alnylam Pharmaceuticals |
| Protara Therapeutics vs. Monopar Therapeutics | Protara Therapeutics vs. Surrozen | Protara Therapeutics vs. Ikena Oncology | Protara Therapeutics vs. Xilio Development |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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