Correlation Between CRISPR Therapeutics and Mosaic

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

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

Diversification Opportunities for CRISPR Therapeutics and Mosaic

0.66

Correlation Coefficient

CRISPR Therapeutics  Mosaic

Poor diversification

The 3 months correlation between CRISPR and Mosaic is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CRISPR Therapeutics AG and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic and CRISPR 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 CRISPR Therapeutics AG are associated (or correlated) with Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of CRISPR Therapeutics i.e., CRISPR Therapeutics and Mosaic go up and down completely randomly.

Pair Corralation between CRISPR Therapeutics and Mosaic

Assuming the 90 days trading horizon CRISPR Therapeutics AG is expected to under-perform the Mosaic. In addition to that, CRISPR Therapeutics is 1.25 times more volatile than The Mosaic. It trades about -0.39 of its total potential returns per unit of risk. The Mosaic is currently generating about -0.28 per unit of volatility. If you would invest  2,815  in The Mosaic on October 4, 2024 and sell it today you would lose (351.00) from holding The Mosaic or give up 12.47% of portfolio value over 90 days.

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

CRISPR Therapeutics AG  vs.  The Mosaic

CRISPR Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CRISPR Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CRISPR Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mosaic

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with CRISPR Therapeutics and Mosaic

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

The idea behind CRISPR Therapeutics AG and The Mosaic 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.