Correlation Between Cullinan Oncology and Arcellx

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

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

Diversification Opportunities for Cullinan Oncology and Arcellx

0.9

Correlation Coefficient

Cullinan Oncology  Arcellx

Almost no diversification

The 3 months correlation between Cullinan and Arcellx is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cullinan Oncology LLC and Arcellx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcellx and Cullinan Oncology 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 Cullinan Oncology LLC are associated (or correlated) with Arcellx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcellx has no effect on the direction of Cullinan Oncology i.e., Cullinan Oncology and Arcellx go up and down completely randomly.

Pair Corralation between Cullinan Oncology and Arcellx

Given the investment horizon of 90 days Cullinan Oncology LLC is expected to under-perform the Arcellx. But the stock apears to be less risky and, when comparing its historical volatility, Cullinan Oncology LLC is 1.03 times less risky than Arcellx. The stock trades about -0.32 of its potential returns per unit of risk. The Arcellx is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  7,875  in Arcellx on December 2, 2024 and sell it today you would lose (1,393) from holding Arcellx or give up 17.69% of portfolio value over 90 days.

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

Cullinan Oncology LLC  vs.  Arcellx

Cullinan Oncology LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Arcellx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arcellx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cullinan Oncology and Arcellx

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

The idea behind Cullinan Oncology LLC and Arcellx 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.