Correlation Between Crinetics Pharmaceuticals and BioRestorative Therapies

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

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

Diversification Opportunities for Crinetics Pharmaceuticals and BioRestorative Therapies

-0.5

Correlation Coefficient

Crinetics Pharmaceuticals  BioRestorative Therapies

Very good diversification

The 3 months correlation between Crinetics and BioRestorative is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Crinetics Pharmaceuticals and BioRestorative Therapies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioRestorative Therapies and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals are associated (or correlated) with BioRestorative Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioRestorative Therapies has no effect on the direction of Crinetics Pharmaceuticals i.e., Crinetics Pharmaceuticals and BioRestorative Therapies go up and down completely randomly.

Pair Corralation between Crinetics Pharmaceuticals and BioRestorative Therapies

Given the investment horizon of 90 days Crinetics Pharmaceuticals is expected to under-perform the BioRestorative Therapies. But the stock apears to be less risky and, when comparing its historical volatility, Crinetics Pharmaceuticals is 1.35 times less risky than BioRestorative Therapies. The stock trades about -0.2 of its potential returns per unit of risk. The BioRestorative Therapies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  168.00  in BioRestorative Therapies on October 21, 2024 and sell it today you would earn a total of  29.00  from holding BioRestorative Therapies or generate 17.26% return on investment over 90 days.

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

Crinetics Pharmaceuticals  vs.  BioRestorative Therapies

Crinetics Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

BioRestorative Therapies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioRestorative Therapies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, BioRestorative Therapies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crinetics Pharmaceuticals and BioRestorative Therapies

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

The idea behind Crinetics Pharmaceuticals and BioRestorative Therapies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.