Correlation Between Instil Bio and Sensei Biotherapeutics

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

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

Diversification Opportunities for Instil Bio and Sensei Biotherapeutics

0.3

Correlation Coefficient

Instil Bio  Sensei Biotherapeutics

Weak diversification

The 3 months correlation between Instil and Sensei is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Instil Bio and Sensei Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensei Biotherapeutics and Instil 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 Instil Bio are associated (or correlated) with Sensei Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensei Biotherapeutics has no effect on the direction of Instil Bio i.e., Instil Bio and Sensei Biotherapeutics go up and down completely randomly.

Pair Corralation between Instil Bio and Sensei Biotherapeutics

Considering the 90-day investment horizon Instil Bio is expected to generate 1.06 times more return on investment than Sensei Biotherapeutics. However, Instil Bio is 1.06 times more volatile than Sensei Biotherapeutics. It trades about 0.07 of its potential returns per unit of risk. Sensei Biotherapeutics is currently generating about 0.01 per unit of risk. If you would invest  1,056  in Instil Bio on October 25, 2024 and sell it today you would earn a total of  916.00  from holding Instil Bio or generate 86.74% return on investment over 90 days.

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

Instil Bio  vs.  Sensei Biotherapeutics

Instil Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sensei Biotherapeutics

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sensei Biotherapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Sensei Biotherapeutics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Instil Bio and Sensei Biotherapeutics

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

The idea behind Instil Bio and Sensei Biotherapeutics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.