Correlation Between Intellia Therapeutics and EnGene Holdings

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

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

Diversification Opportunities for Intellia Therapeutics and EnGene Holdings

0.02

Correlation Coefficient

Intellia Therapeutics  EnGene Holdings

Significant diversification

The 3 months correlation between Intellia and EnGene is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Intellia Therapeutics and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common and Intellia 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 Intellia Therapeutics are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Intellia Therapeutics i.e., Intellia Therapeutics and EnGene Holdings go up and down completely randomly.

Pair Corralation between Intellia Therapeutics and EnGene Holdings

Given the investment horizon of 90 days Intellia Therapeutics is expected to under-perform the EnGene Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Intellia Therapeutics is 1.74 times less risky than EnGene Holdings. The stock trades about -0.11 of its potential returns per unit of risk. The enGene Holdings Common is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  897.00  in enGene Holdings Common on September 25, 2024 and sell it today you would lose (292.00) from holding enGene Holdings Common or give up 32.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Intellia Therapeutics  vs.  enGene Holdings Common

Intellia Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intellia Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

enGene Holdings Common

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, EnGene Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intellia Therapeutics and EnGene Holdings

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

The idea behind Intellia Therapeutics and enGene Holdings Common 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.