Correlation Between Beam Therapeutics and Bio Techne

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

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

Diversification Opportunities for Beam Therapeutics and Bio Techne

-0.46

Correlation Coefficient

Beam Therapeutics  Bio Techne

Very good diversification

The 3 months correlation between Beam and Bio is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics and Bio Techne Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne Corp and Beam Therapeutics 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 Beam Therapeutics are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne Corp has no effect on the direction of Beam Therapeutics i.e., Beam Therapeutics and Bio Techne go up and down completely randomly.

Pair Corralation between Beam Therapeutics and Bio Techne

Given the investment horizon of 90 days Beam Therapeutics is expected to generate 2.1 times more return on investment than Bio Techne. However, Beam Therapeutics is 2.1 times more volatile than Bio Techne Corp. It trades about 0.06 of its potential returns per unit of risk. Bio Techne Corp is currently generating about -0.17 per unit of risk. If you would invest  2,470  in Beam Therapeutics on December 2, 2024 and sell it today you would earn a total of  164.00  from holding Beam Therapeutics or generate 6.64% return on investment over 90 days.

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

Beam Therapeutics  vs.  Bio Techne Corp

Beam Therapeutics

Risk-Adjusted Performance

Very Weak

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

Bio Techne Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bio Techne Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Beam Therapeutics and Bio Techne

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

The idea behind Beam Therapeutics and Bio Techne Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.