Correlation Between Ginkgo Bioworks and Viracta Therapeutics

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

Diversification Opportunities for Ginkgo Bioworks and Viracta Therapeutics

0.07

Correlation Coefficient

Ginkgo Bioworks  Viracta Therapeutics

Significant diversification

The 3 months correlation between Ginkgo and Viracta is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Viracta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viracta Therapeutics 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 Viracta Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viracta Therapeutics has no effect on the direction of Ginkgo Bioworks i.e., Ginkgo Bioworks and Viracta Therapeutics go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Viracta Therapeutics

Considering the 90-day investment horizon Ginkgo Bioworks is expected to generate 3.75 times less return on investment than Viracta Therapeutics. But when comparing it to its historical volatility, Ginkgo Bioworks Holdings is 1.58 times less risky than Viracta Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Viracta Therapeutics is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Viracta Therapeutics on October 10, 2024 and sell it today you would earn a total of  4.00  from holding Viracta Therapeutics or generate 23.53% return on investment over 90 days.

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

Ginkgo Bioworks Holdings  vs.  Viracta Therapeutics

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.

Viracta Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Viracta Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Viracta Therapeutics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ginkgo Bioworks and Viracta Therapeutics

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

The idea behind Ginkgo Bioworks Holdings and Viracta Therapeutics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.