Correlation Between Ginkgo Bioworks and Estrella Immunopharma

Can any of the company-specific risk be diversified away by investing in both Ginkgo Bioworks and Estrella Immunopharma 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 Estrella Immunopharma 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 Estrella Immunopharma, you can compare the effects of market volatilities on Ginkgo Bioworks and Estrella Immunopharma 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 Estrella Immunopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ginkgo Bioworks and Estrella Immunopharma.

Diversification Opportunities for Ginkgo Bioworks and Estrella Immunopharma

0.74

Correlation Coefficient

Ginkgo Bioworks  Estrella Immunopharma

Poor diversification

The 3 months correlation between Ginkgo and Estrella is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Estrella Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estrella Immunopharma 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 Estrella Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estrella Immunopharma has no effect on the direction of Ginkgo Bioworks i.e., Ginkgo Bioworks and Estrella Immunopharma go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Estrella Immunopharma

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to under-perform the Estrella Immunopharma. But the stock apears to be less risky and, when comparing its historical volatility, Ginkgo Bioworks Holdings is 1.94 times less risky than Estrella Immunopharma. The stock trades about -0.03 of its potential returns per unit of risk. The Estrella Immunopharma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,040  in Estrella Immunopharma on October 10, 2024 and sell it today you would lose (929.00) from holding Estrella Immunopharma or give up 89.33% of portfolio value over 90 days.

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

Ginkgo Bioworks Holdings  vs.  Estrella Immunopharma

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.

Estrella Immunopharma

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady essential indicators, Estrella Immunopharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ginkgo Bioworks and Estrella Immunopharma

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

The idea behind Ginkgo Bioworks Holdings and Estrella Immunopharma 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 Transaction History module to view history of all your transactions and understand their impact on performance.