Correlation Between 89bio and Ginkgo Bioworks

Can any of the company-specific risk be diversified away by investing in both 89bio and Ginkgo Bioworks 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 89bio and Ginkgo Bioworks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 89bio Inc and Ginkgo Bioworks Holdings, you can compare the effects of market volatilities on 89bio and Ginkgo Bioworks 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 89bio with a short position of Ginkgo Bioworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of 89bio and Ginkgo Bioworks.

Diversification Opportunities for 89bio and Ginkgo Bioworks

-0.3

Correlation Coefficient

89bio  Ginkgo Bioworks

Very good diversification

The 3 months correlation between 89bio and Ginkgo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding 89bio Inc and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings and 89bio 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 89bio Inc are associated (or correlated) with Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of 89bio i.e., 89bio and Ginkgo Bioworks go up and down completely randomly.

Pair Corralation between 89bio and Ginkgo Bioworks

Given the investment horizon of 90 days 89bio Inc is expected to generate 0.63 times more return on investment than Ginkgo Bioworks. However, 89bio Inc is 1.58 times less risky than Ginkgo Bioworks. It trades about -0.02 of its potential returns per unit of risk. Ginkgo Bioworks Holdings is currently generating about -0.05 per unit of risk. If you would invest  1,071  in 89bio Inc on October 24, 2024 and sell it today you would lose (395.00) from holding 89bio Inc or give up 36.88% of portfolio value over 90 days.

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

89bio Inc  vs.  Ginkgo Bioworks Holdings

89bio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 89bio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat 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.

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

11 of 100

OK

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.

Pair Trading with 89bio and Ginkgo Bioworks

The main advantage of trading using opposite 89bio and Ginkgo Bioworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 89bio position performs unexpectedly, Ginkgo Bioworks 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 Ginkgo Bioworks will offset losses from the drop in Ginkgo Bioworks' long position.

The idea behind 89bio Inc and Ginkgo Bioworks Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.