Correlation Between Western Acquisition and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Western Acquisition and Abcellera Biologics 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 Western Acquisition and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Abcellera Biologics, you can compare the effects of market volatilities on Western Acquisition and Abcellera Biologics 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 Western Acquisition with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Abcellera Biologics.
Diversification Opportunities for Western Acquisition and Abcellera Biologics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Abcellera is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Western Acquisition 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 Western Acquisition Ventures are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Western Acquisition i.e., Western Acquisition and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Western Acquisition and Abcellera Biologics
Given the investment horizon of 90 days Western Acquisition Ventures is expected to under-perform the Abcellera Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Western Acquisition Ventures is 2.3 times less risky than Abcellera Biologics. The stock trades about -0.17 of its potential returns per unit of risk. The Abcellera Biologics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 289.00 in Abcellera Biologics on August 27, 2024 and sell it today you would lose (13.00) from holding Abcellera Biologics or give up 4.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Abcellera Biologics
Performance |
| Timeline |
| Western Acquisition |
| Abcellera Biologics |
Western Acquisition and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Abcellera Biologics
The main advantage of trading using opposite Western Acquisition and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.| Western Acquisition vs. PowerUp Acquisition Corp | Western Acquisition vs. Aurora Innovation | Western Acquisition vs. HUMANA INC | Western Acquisition vs. Aquagold International |
| Abcellera Biologics vs. Hepion Pharmaceuticals | Abcellera Biologics vs. Krystal Biotech | Abcellera Biologics vs. CureVac NV | Abcellera Biologics vs. Vir Biotechnology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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