Correlation Between Caribou Biosciences and Cytokinetics

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

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

Diversification Opportunities for Caribou Biosciences and Cytokinetics

0.62

Correlation Coefficient

Caribou Biosciences  Cytokinetics

Poor diversification

The 3 months correlation between Caribou and Cytokinetics is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Cytokinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytokinetics 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 Cytokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytokinetics has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and Cytokinetics go up and down completely randomly.

Pair Corralation between Caribou Biosciences and Cytokinetics

Given the investment horizon of 90 days Caribou Biosciences is expected to under-perform the Cytokinetics. In addition to that, Caribou Biosciences is 1.13 times more volatile than Cytokinetics. It trades about -0.02 of its total potential returns per unit of risk. Cytokinetics is currently generating about 0.02 per unit of volatility. If you would invest  4,220  in Cytokinetics on October 13, 2024 and sell it today you would earn a total of  442.00  from holding Cytokinetics or generate 10.47% return on investment over 90 days.

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

Caribou Biosciences  vs.  Cytokinetics

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 latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Cytokinetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytokinetics 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 quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Caribou Biosciences and Cytokinetics

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

The idea behind Caribou Biosciences and Cytokinetics 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.