Correlation Between Twist Bioscience and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Twist Bioscience and Lonza Group 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 Twist Bioscience and Lonza Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twist Bioscience Corp and Lonza Group, you can compare the effects of market volatilities on Twist Bioscience and Lonza Group 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 Twist Bioscience with a short position of Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twist Bioscience and Lonza Group.
Diversification Opportunities for Twist Bioscience and Lonza Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Twist and Lonza is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Twist Bioscience Corp and Lonza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group and Twist Bioscience 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 Twist Bioscience Corp are associated (or correlated) with Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group has no effect on the direction of Twist Bioscience i.e., Twist Bioscience and Lonza Group go up and down completely randomly.
Pair Corralation between Twist Bioscience and Lonza Group
Given the investment horizon of 90 days Twist Bioscience Corp is expected to under-perform the Lonza Group. In addition to that, Twist Bioscience is 1.41 times more volatile than Lonza Group. It trades about -0.35 of its total potential returns per unit of risk. Lonza Group is currently generating about -0.04 per unit of volatility. If you would invest 66,538 in Lonza Group on December 1, 2024 and sell it today you would lose (1,918) from holding Lonza Group or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Twist Bioscience Corp vs. Lonza Group
Performance |
| Timeline |
| Twist Bioscience Corp |
| Lonza Group |
Twist Bioscience and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twist Bioscience and Lonza Group
The main advantage of trading using opposite Twist Bioscience and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twist Bioscience position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group's long position.| Twist Bioscience vs. Personalis | Twist Bioscience vs. Natera Inc | Twist Bioscience vs. Guardant Health | Twist Bioscience vs. Castle Biosciences |
| Lonza Group vs. China New Energy | Lonza Group vs. Sonic Healthcare Ltd | Lonza Group vs. Charles River Laboratories | Lonza Group vs. Qiagen NV |
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 CEOs Directory module to screen CEOs from public companies around the world.
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