Correlation Between Intellia Therapeutics and Twist Bioscience

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

By analyzing existing cross correlation between Intellia Therapeutics and Twist Bioscience Corp, you can compare the effects of market volatilities on Intellia Therapeutics and Twist Bioscience 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 Twist Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intellia Therapeutics and Twist Bioscience.

Diversification Opportunities for Intellia Therapeutics and Twist Bioscience

0.29

Correlation Coefficient

Intellia Therapeutics  Twist Bioscience

Modest diversification

The 3 months correlation between Intellia and Twist is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Intellia Therapeutics and Twist Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twist Bioscience Corp 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 Twist Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twist Bioscience Corp has no effect on the direction of Intellia Therapeutics i.e., Intellia Therapeutics and Twist Bioscience go up and down completely randomly.

Pair Corralation between Intellia Therapeutics and Twist Bioscience

Given the investment horizon of 90 days Intellia Therapeutics is expected to under-perform the Twist Bioscience. In addition to that, Intellia Therapeutics is 1.07 times more volatile than Twist Bioscience Corp. It trades about -0.08 of its total potential returns per unit of risk. Twist Bioscience Corp is currently generating about 0.11 per unit of volatility. If you would invest  3,955  in Twist Bioscience Corp on September 4, 2024 and sell it today you would earn a total of  1,106  from holding Twist Bioscience Corp or generate 27.96% return on investment over 90 days.

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

Intellia Therapeutics  vs.  Twist Bioscience Corp

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.

Twist Bioscience Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Twist Bioscience Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Twist Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intellia Therapeutics and Twist Bioscience

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

The idea behind Intellia Therapeutics and Twist Bioscience Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.