Correlation Between CRISPR Therapeutics and Pettenati

Can any of the company-specific risk be diversified away by investing in both CRISPR Therapeutics and Pettenati 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 Pettenati 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 Pettenati SA Industria, you can compare the effects of market volatilities on CRISPR Therapeutics and Pettenati 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 Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRISPR Therapeutics and Pettenati.

Diversification Opportunities for CRISPR Therapeutics and Pettenati

-0.26

Correlation Coefficient

CRISPR Therapeutics  Pettenati

Very good diversification

The 3 months correlation between CRISPR and Pettenati is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CRISPR Therapeutics AG and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria 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 Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of CRISPR Therapeutics i.e., CRISPR Therapeutics and Pettenati go up and down completely randomly.

Pair Corralation between CRISPR Therapeutics and Pettenati

Assuming the 90 days trading horizon CRISPR Therapeutics AG is expected to generate 1.8 times more return on investment than Pettenati. However, CRISPR Therapeutics is 1.8 times more volatile than Pettenati SA Industria. It trades about 0.02 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about -0.11 per unit of risk. If you would invest  3,099  in CRISPR Therapeutics AG on October 6, 2024 and sell it today you would earn a total of  53.00  from holding CRISPR Therapeutics AG or generate 1.71% return on investment over 90 days.

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

CRISPR Therapeutics AG  vs.  Pettenati SA Industria

CRISPR Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CRISPR Therapeutics AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pettenati SA Industria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pettenati SA Industria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CRISPR Therapeutics and Pettenati

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

The idea behind CRISPR Therapeutics AG and Pettenati SA Industria 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.