Correlation Between Passage Bio and FIXX Old

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

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

Diversification Opportunities for Passage Bio and FIXX Old

-0.06

Correlation Coefficient

Passage Bio  FIXX Old

Good diversification

The 3 months correlation between Passage and FIXX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and FIXX Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIXX Old and Passage Bio 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 Passage Bio are associated (or correlated) with FIXX Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIXX Old has no effect on the direction of Passage Bio i.e., Passage Bio and FIXX Old go up and down completely randomly.

Pair Corralation between Passage Bio and FIXX Old

If you would invest  60.00  in Passage Bio on October 25, 2024 and sell it today you would lose (0.41) from holding Passage Bio or give up 0.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Passage Bio  vs.  FIXX Old

Passage Bio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Passage Bio are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Passage Bio reported solid returns over the last few months and may actually be approaching a breakup point.

FIXX Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Passage Bio and FIXX Old

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

The idea behind Passage Bio and FIXX Old 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.