Correlation Between Ginkgo Bioworks and AVRO Old

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

By analyzing existing cross correlation between Ginkgo Bioworks Holdings and AVRO Old, you can compare the effects of market volatilities on Ginkgo Bioworks and AVRO Old 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 Ginkgo Bioworks with a short position of AVRO Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ginkgo Bioworks and AVRO Old.

Diversification Opportunities for Ginkgo Bioworks and AVRO Old

0.56

Correlation Coefficient

Ginkgo Bioworks  AVRO Old

Very weak diversification

The 3 months correlation between Ginkgo and AVRO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and AVRO Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVRO Old and Ginkgo Bioworks 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 Ginkgo Bioworks Holdings are associated (or correlated) with AVRO Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVRO Old has no effect on the direction of Ginkgo Bioworks i.e., Ginkgo Bioworks and AVRO Old go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and AVRO Old

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to under-perform the AVRO Old. But the stock apears to be less risky and, when comparing its historical volatility, Ginkgo Bioworks Holdings is 1.34 times less risky than AVRO Old. The stock trades about -0.03 of its potential returns per unit of risk. The AVRO Old is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  93.00  in AVRO Old on October 25, 2024 and sell it today you would earn a total of  47.00  from holding AVRO Old or generate 50.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.39%
Values	Daily Returns

Ginkgo Bioworks Holdings  vs.  AVRO Old

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ginkgo Bioworks Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ginkgo Bioworks sustained solid returns over the last few months and may actually be approaching a breakup point.

AVRO Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AVRO Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, AVRO Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ginkgo Bioworks and AVRO Old

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

The idea behind Ginkgo Bioworks Holdings and AVRO Old 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.