Correlation Between Field Trip and Freeline Therapeutics

Can any of the company-specific risk be diversified away by investing in both Field Trip and Freeline 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 Field Trip and Freeline Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Field Trip Health and Freeline Therapeutics Holdings, you can compare the effects of market volatilities on Field Trip and Freeline 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 Field Trip with a short position of Freeline Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Field Trip and Freeline Therapeutics.

Diversification Opportunities for Field Trip and Freeline Therapeutics

0.36

Correlation Coefficient

Field Trip  Freeline Therapeutics

Weak diversification

The 3 months correlation between Field and Freeline is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Field Trip Health and Freeline Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeline Therapeutics and Field Trip 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 Field Trip Health are associated (or correlated) with Freeline Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeline Therapeutics has no effect on the direction of Field Trip i.e., Field Trip and Freeline Therapeutics go up and down completely randomly.

Pair Corralation between Field Trip and Freeline Therapeutics

If you would invest  431.00  in Freeline Therapeutics Holdings on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Freeline Therapeutics Holdings or generate 0.0% return on investment over 90 days.

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

Field Trip Health  vs.  Freeline Therapeutics Holdings

Field Trip Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Field Trip Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Field Trip is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Freeline Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Field Trip and Freeline Therapeutics

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

The idea behind Field Trip Health and Freeline Therapeutics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.