Correlation Between Ginkgo Bioworks and Incyte

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

Diversification Opportunities for Ginkgo Bioworks and Incyte

-0.03

Correlation Coefficient

Ginkgo Bioworks  Incyte

Good diversification

The 3 months correlation between Ginkgo and Incyte is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Incyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incyte 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 Incyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incyte has no effect on the direction of Ginkgo Bioworks i.e., Ginkgo Bioworks and Incyte go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Incyte

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to generate 3.93 times more return on investment than Incyte. However, Ginkgo Bioworks is 3.93 times more volatile than Incyte. It trades about 0.07 of its potential returns per unit of risk. Incyte is currently generating about 0.07 per unit of risk. If you would invest  1,070  in Ginkgo Bioworks Holdings on October 10, 2024 and sell it today you would earn a total of  50.00  from holding Ginkgo Bioworks Holdings or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Ginkgo Bioworks Holdings  vs.  Incyte

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.

Incyte

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Ginkgo Bioworks and Incyte

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

The idea behind Ginkgo Bioworks Holdings and Incyte 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.