Correlation Between Adicet Bio and Assembly Biosciences

Can any of the company-specific risk be diversified away by investing in both Adicet Bio and Assembly Biosciences 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 Adicet Bio and Assembly Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adicet Bio and Assembly Biosciences, you can compare the effects of market volatilities on Adicet Bio and Assembly Biosciences 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 Adicet Bio with a short position of Assembly Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adicet Bio and Assembly Biosciences.

Diversification Opportunities for Adicet Bio and Assembly Biosciences

0.43

Correlation Coefficient

Adicet Bio  Assembly Biosciences

Very weak diversification

The 3 months correlation between Adicet and Assembly is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Adicet Bio and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences and Adicet Bio 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 Adicet Bio are associated (or correlated) with Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of Adicet Bio i.e., Adicet Bio and Assembly Biosciences go up and down completely randomly.

Pair Corralation between Adicet Bio and Assembly Biosciences

Given the investment horizon of 90 days Adicet Bio is expected to generate 2.73 times less return on investment than Assembly Biosciences. But when comparing it to its historical volatility, Adicet Bio is 1.06 times less risky than Assembly Biosciences. It trades about 0.02 of its potential returns per unit of risk. Assembly Biosciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,481  in Assembly Biosciences on September 24, 2024 and sell it today you would earn a total of  66.00  from holding Assembly Biosciences or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Adicet Bio  vs.  Assembly Biosciences

Adicet Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adicet Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Assembly Biosciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Assembly Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Assembly Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Adicet Bio and Assembly Biosciences

The main advantage of trading using opposite Adicet Bio and Assembly Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adicet Bio position performs unexpectedly, Assembly Biosciences 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 Assembly Biosciences will offset losses from the drop in Assembly Biosciences' long position.

The idea behind Adicet Bio and Assembly Biosciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.