Correlation Between Caribou Biosciences and Absci Corp

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

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

Diversification Opportunities for Caribou Biosciences and Absci Corp

0.09

Correlation Coefficient

Caribou Biosciences  Absci Corp

Significant diversification

The 3 months correlation between Caribou and Absci is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Absci Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absci Corp and Caribou Biosciences 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 Caribou Biosciences are associated (or correlated) with Absci Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absci Corp has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Absci Corp go up and down completely randomly.

Pair Corralation between Caribou Biosciences and Absci Corp

Given the investment horizon of 90 days Caribou Biosciences is expected to under-perform the Absci Corp. But the stock apears to be less risky and, when comparing its historical volatility, Caribou Biosciences is 1.08 times less risky than Absci Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Absci Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  226.00  in Absci Corp on September 23, 2024 and sell it today you would earn a total of  73.00  from holding Absci Corp or generate 32.3% return on investment over 90 days.

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

Caribou Biosciences  vs.  Absci Corp

Caribou Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caribou Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Caribou Biosciences is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Absci Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Absci Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady 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.

Pair Trading with Caribou Biosciences and Absci Corp

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

The idea behind Caribou Biosciences and Absci 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..