Correlation Between Waters and Mustang Bio
Can any of the company-specific risk be diversified away by investing in both Waters and Mustang Bio 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 Waters and Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waters and Mustang Bio, you can compare the effects of market volatilities on Waters and Mustang Bio 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 Waters with a short position of Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waters and Mustang Bio.
Diversification Opportunities for Waters and Mustang Bio
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Waters and Mustang is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Waters and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio and Waters 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 Waters are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of Waters i.e., Waters and Mustang Bio go up and down completely randomly.
Pair Corralation between Waters and Mustang Bio
Considering the 90-day investment horizon Waters is expected to generate 0.08 times more return on investment than Mustang Bio. However, Waters is 12.29 times less risky than Mustang Bio. It trades about 0.07 of its potential returns per unit of risk. Mustang Bio is currently generating about 0.0 per unit of risk. If you would invest 24,996 in Waters on August 31, 2024 and sell it today you would earn a total of 13,476 from holding Waters or generate 53.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waters vs. Mustang Bio
Performance |
| Timeline |
| Waters |
| Mustang Bio |
Waters and Mustang Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waters and Mustang Bio
The main advantage of trading using opposite Waters and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waters position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.| Waters vs. IDEXX Laboratories | Waters vs. IQVIA Holdings | Waters vs. Charles River Laboratories | Waters vs. Revvity |
| Mustang Bio vs. Checkpoint Therapeutics | Mustang Bio vs. Reviva Pharmaceuticals Holdings | Mustang Bio vs. Fortress Biotech Pref | Mustang Bio vs. Kodiak Sciences |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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