Correlation Between Caribou Biosciences and EnGene Holdings

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

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

Diversification Opportunities for Caribou Biosciences and EnGene Holdings

0.29

Correlation Coefficient

Caribou Biosciences  EnGene Holdings

Modest diversification

The 3 months correlation between Caribou and EnGene is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common 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 EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and EnGene Holdings go up and down completely randomly.

Pair Corralation between Caribou Biosciences and EnGene Holdings

Given the investment horizon of 90 days Caribou Biosciences is expected to generate 0.78 times more return on investment than EnGene Holdings. However, Caribou Biosciences is 1.29 times less risky than EnGene Holdings. It trades about 0.03 of its potential returns per unit of risk. enGene Holdings Common is currently generating about -0.01 per unit of risk. If you would invest  168.00  in Caribou Biosciences on September 25, 2024 and sell it today you would earn a total of  1.00  from holding Caribou Biosciences or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Caribou Biosciences  vs.  enGene Holdings Common

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.

enGene Holdings Common

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, EnGene Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caribou Biosciences and EnGene Holdings

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

The idea behind Caribou Biosciences and enGene Holdings Common 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..