Correlation Between Bio Path and Freeline Therapeutics

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

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

Diversification Opportunities for Bio Path and Freeline Therapeutics

-0.28

Correlation Coefficient

Bio Path  Freeline Therapeutics

Very good diversification

The 3 months correlation between Bio and Freeline is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and Freeline Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeline Therapeutics and Bio Path 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 Bio Path Holdings are associated (or correlated) with Freeline Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeline Therapeutics has no effect on the direction of Bio Path i.e., Bio Path and Freeline Therapeutics go up and down completely randomly.

Pair Corralation between Bio Path and Freeline Therapeutics

If you would invest  431.00  in Freeline Therapeutics Holdings on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Freeline Therapeutics Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Bio Path Holdings  vs.  Freeline Therapeutics Holdings

Bio Path Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Path Holdings 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 basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Freeline Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bio Path and Freeline Therapeutics

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

The idea behind Bio Path Holdings and Freeline Therapeutics Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.