Correlation Between Stoke Therapeutics and Beam Therapeutics
Can any of the company-specific risk be diversified away by investing in both Stoke Therapeutics and Beam 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 Stoke Therapeutics and Beam Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoke Therapeutics and Beam Therapeutics, you can compare the effects of market volatilities on Stoke Therapeutics and Beam 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 Stoke Therapeutics with a short position of Beam Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoke Therapeutics and Beam Therapeutics.
Diversification Opportunities for Stoke Therapeutics and Beam Therapeutics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stoke and Beam is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Stoke Therapeutics and Beam Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beam Therapeutics and Stoke 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 Stoke Therapeutics are associated (or correlated) with Beam Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beam Therapeutics has no effect on the direction of Stoke Therapeutics i.e., Stoke Therapeutics and Beam Therapeutics go up and down completely randomly.
Pair Corralation between Stoke Therapeutics and Beam Therapeutics
Given the investment horizon of 90 days Stoke Therapeutics is expected to under-perform the Beam Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Stoke Therapeutics is 1.01 times less risky than Beam Therapeutics. The stock trades about -0.09 of its potential returns per unit of risk. The Beam Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,668 in Beam Therapeutics on November 28, 2024 and sell it today you would earn a total of 200.00 from holding Beam Therapeutics or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoke Therapeutics vs. Beam Therapeutics
Performance |
| Timeline |
| Stoke Therapeutics |
| Beam Therapeutics |
Stoke Therapeutics and Beam Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoke Therapeutics and Beam Therapeutics
The main advantage of trading using opposite Stoke Therapeutics and Beam Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoke Therapeutics position performs unexpectedly, Beam 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 Beam Therapeutics will offset losses from the drop in Beam Therapeutics' long position.| Stoke Therapeutics vs. Adaptimmune Therapeutics Plc | Stoke Therapeutics vs. Black Diamond Therapeutics | Stoke Therapeutics vs. Relay Therapeutics | Stoke Therapeutics vs. Pliant Therapeutics |
| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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