Correlation Between Magenta Therapeutics and Instil Bio

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

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

Diversification Opportunities for Magenta Therapeutics and Instil Bio

0.0

Correlation Coefficient

Magenta Therapeutics  Instil Bio

Pay attention - limited upside

The 3 months correlation between Magenta and Instil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magenta Therapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Magenta Therapeutics 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 Magenta Therapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Magenta Therapeutics i.e., Magenta Therapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between Magenta Therapeutics and Instil Bio

If you would invest  1,899  in Instil Bio on December 28, 2024 and sell it today you would lose (44.00) from holding Instil Bio or give up 2.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Magenta Therapeutics  vs.  Instil Bio

Magenta Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Magenta Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Magenta Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Instil Bio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Magenta Therapeutics and Instil Bio

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

The idea behind Magenta Therapeutics and Instil Bio 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.