Correlation Between Caribou Biosciences and Bio Rad

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

By analyzing existing cross correlation between Caribou Biosciences and Bio Rad Laboratories, you can compare the effects of market volatilities on Caribou Biosciences and Bio Rad 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 Bio Rad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribou Biosciences and Bio Rad.

Diversification Opportunities for Caribou Biosciences and Bio Rad

0.7

Correlation Coefficient

Caribou Biosciences  Bio Rad

Poor diversification

The 3 months correlation between Caribou and Bio is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Bio Rad Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Rad Laboratories 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 Bio Rad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Rad Laboratories has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Bio Rad go up and down completely randomly.

Pair Corralation between Caribou Biosciences and Bio Rad

Given the investment horizon of 90 days Caribou Biosciences is expected to under-perform the Bio Rad. In addition to that, Caribou Biosciences is 1.91 times more volatile than Bio Rad Laboratories. It trades about -0.23 of its total potential returns per unit of risk. Bio Rad Laboratories is currently generating about -0.1 per unit of volatility. If you would invest  36,595  in Bio Rad Laboratories on September 12, 2024 and sell it today you would lose (2,608) from holding Bio Rad Laboratories or give up 7.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Caribou Biosciences  vs.  Bio Rad Laboratories

Caribou Biosciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Caribou Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Caribou Biosciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bio Rad Laboratories

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Rad Laboratories are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Bio Rad may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Caribou Biosciences and Bio Rad

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

The idea behind Caribou Biosciences and Bio Rad Laboratories 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.