Correlation Between Senti Biosciences and Adagene
Can any of the company-specific risk be diversified away by investing in both Senti Biosciences and Adagene 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 Senti Biosciences and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senti Biosciences and Adagene, you can compare the effects of market volatilities on Senti Biosciences and Adagene 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 Senti Biosciences with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senti Biosciences and Adagene.
Diversification Opportunities for Senti Biosciences and Adagene
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Senti and Adagene is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Senti Biosciences and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Senti Biosciences 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 Senti Biosciences are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Senti Biosciences i.e., Senti Biosciences and Adagene go up and down completely randomly.
Pair Corralation between Senti Biosciences and Adagene
Given the investment horizon of 90 days Senti Biosciences is expected to under-perform the Adagene. In addition to that, Senti Biosciences is 1.26 times more volatile than Adagene. It trades about -0.01 of its total potential returns per unit of risk. Adagene is currently generating about 0.06 per unit of volatility. If you would invest 125.00 in Adagene on September 1, 2024 and sell it today you would earn a total of 109.00 from holding Adagene or generate 87.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senti Biosciences vs. Adagene
Performance |
| Timeline |
| Senti Biosciences |
| Adagene |
Senti Biosciences and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senti Biosciences and Adagene
The main advantage of trading using opposite Senti Biosciences and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senti Biosciences position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Senti Biosciences vs. Cadrenal Therapeutics, Common | Senti Biosciences vs. Foghorn Therapeutics | Senti Biosciences vs. Quoin Pharmaceuticals Ltd | Senti Biosciences vs. SAB Biotherapeutics |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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