Correlation Between Senti Biosciences and Bellicum Pharmaceuticals

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Can any of the company-specific risk be diversified away by investing in both Senti Biosciences and Bellicum Pharmaceuticals 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 Senti Biosciences and Bellicum Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senti Biosciences and Bellicum Pharmaceuticals, you can compare the effects of market volatilities on Senti Biosciences and Bellicum Pharmaceuticals 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 Senti Biosciences with a short position of Bellicum Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senti Biosciences and Bellicum Pharmaceuticals.

Diversification Opportunities for Senti Biosciences and Bellicum Pharmaceuticals

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Senti and Bellicum is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Senti Biosciences and Bellicum Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellicum Pharmaceuticals and Senti Biosciences 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 Senti Biosciences are associated (or correlated) with Bellicum Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellicum Pharmaceuticals has no effect on the direction of Senti Biosciences i.e., Senti Biosciences and Bellicum Pharmaceuticals go up and down completely randomly.

Pair Corralation between Senti Biosciences and Bellicum Pharmaceuticals

Given the investment horizon of 90 days Senti Biosciences is expected to generate 1.32 times less return on investment than Bellicum Pharmaceuticals. But when comparing it to its historical volatility, Senti Biosciences is 1.22 times less risky than Bellicum Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Bellicum Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Bellicum Pharmaceuticals on October 11, 2024 and sell it today you would lose (91.00) from holding Bellicum Pharmaceuticals or give up 71.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy20.0%
ValuesDaily Returns

Senti Biosciences  vs.  Bellicum Pharmaceuticals

 Performance 
       Timeline  
Senti Biosciences 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Senti Biosciences are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Senti Biosciences demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Bellicum Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bellicum Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bellicum Pharmaceuticals is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Senti Biosciences and Bellicum Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Senti Biosciences and Bellicum Pharmaceuticals

The main advantage of trading using opposite Senti Biosciences and Bellicum Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senti Biosciences position performs unexpectedly, Bellicum Pharmaceuticals 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 Bellicum Pharmaceuticals will offset losses from the drop in Bellicum Pharmaceuticals' long position.
The idea behind Senti Biosciences and Bellicum Pharmaceuticals 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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