Correlation Between Vaxcyte and Fate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Vaxcyte and Fate 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 Vaxcyte and Fate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaxcyte and Fate Therapeutics, you can compare the effects of market volatilities on Vaxcyte and Fate 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 Vaxcyte with a short position of Fate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaxcyte and Fate Therapeutics.
Diversification Opportunities for Vaxcyte and Fate Therapeutics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vaxcyte and Fate is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Vaxcyte and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics and Vaxcyte 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 Vaxcyte are associated (or correlated) with Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Vaxcyte i.e., Vaxcyte and Fate Therapeutics go up and down completely randomly.
Pair Corralation between Vaxcyte and Fate Therapeutics
Given the investment horizon of 90 days Vaxcyte is expected to generate 0.57 times more return on investment than Fate Therapeutics. However, Vaxcyte is 1.77 times less risky than Fate Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 6,280 in Vaxcyte on September 24, 2024 and sell it today you would earn a total of 2,373 from holding Vaxcyte or generate 37.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.6% |
Values | Daily Returns |
Vaxcyte vs. Fate Therapeutics
Performance |
Timeline |
Vaxcyte |
Fate Therapeutics |
Vaxcyte and Fate Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vaxcyte and Fate Therapeutics
The main advantage of trading using opposite Vaxcyte and Fate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaxcyte position performs unexpectedly, Fate 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 Fate Therapeutics will offset losses from the drop in Fate Therapeutics' long position.Vaxcyte vs. Fate Therapeutics | Vaxcyte vs. Sana Biotechnology | Vaxcyte vs. Caribou Biosciences | Vaxcyte vs. Arcus Biosciences |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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