Correlation Between Atara Biotherapeutics and Bellicum Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Atara Biotherapeutics and Bellicum Pharmaceuticals 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 Atara Biotherapeutics and Bellicum Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Atara Biotherapeutics and Bellicum Pharmaceuticals

0.0

Correlation Coefficient

Atara Biotherapeutics  Bellicum Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Atara and Bellicum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atara Biotherapeutics and Bellicum Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellicum Pharmaceuticals and Atara Biotherapeutics 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 Atara Biotherapeutics are associated (or correlated) with Bellicum Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellicum Pharmaceuticals has no effect on the direction of Atara Biotherapeutics i.e., Atara Biotherapeutics and Bellicum Pharmaceuticals go up and down completely randomly.

Pair Corralation between Atara Biotherapeutics and Bellicum Pharmaceuticals

Given the investment horizon of 90 days Atara Biotherapeutics is expected to generate 9.36 times less return on investment than Bellicum Pharmaceuticals. But when comparing it to its historical volatility, Atara Biotherapeutics is 2.7 times less risky than Bellicum Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Bellicum Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Bellicum Pharmaceuticals on October 11, 2024 and sell it today you would lose (91.00) from holding Bellicum Pharmaceuticals or give up 71.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	19.96%
Values	Daily Returns

Atara Biotherapeutics  vs.  Bellicum Pharmaceuticals

Atara Biotherapeutics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atara Biotherapeutics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Atara Biotherapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Bellicum Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellicum Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bellicum Pharmaceuticals is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Atara Biotherapeutics and Bellicum Pharmaceuticals

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

The idea behind Atara Biotherapeutics and Bellicum Pharmaceuticals 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.