Correlation Between Tenaya Therapeutics and Biomea Fusion
Can any of the company-specific risk be diversified away by investing in both Tenaya Therapeutics and Biomea Fusion 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 Tenaya Therapeutics and Biomea Fusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaya Therapeutics and Biomea Fusion, you can compare the effects of market volatilities on Tenaya Therapeutics and Biomea Fusion 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 Tenaya Therapeutics with a short position of Biomea Fusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaya Therapeutics and Biomea Fusion.
Diversification Opportunities for Tenaya Therapeutics and Biomea Fusion
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tenaya and Biomea is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tenaya Therapeutics and Biomea Fusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomea Fusion and Tenaya 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 Tenaya Therapeutics are associated (or correlated) with Biomea Fusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomea Fusion has no effect on the direction of Tenaya Therapeutics i.e., Tenaya Therapeutics and Biomea Fusion go up and down completely randomly.
Pair Corralation between Tenaya Therapeutics and Biomea Fusion
Given the investment horizon of 90 days Tenaya Therapeutics is expected to under-perform the Biomea Fusion. In addition to that, Tenaya Therapeutics is 1.8 times more volatile than Biomea Fusion. It trades about -0.16 of its total potential returns per unit of risk. Biomea Fusion is currently generating about -0.26 per unit of volatility. If you would invest 727.00 in Biomea Fusion on December 1, 2024 and sell it today you would lose (438.00) from holding Biomea Fusion or give up 60.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Tenaya Therapeutics vs. Biomea Fusion
Performance |
Timeline |
Tenaya Therapeutics |
Biomea Fusion |
Tenaya Therapeutics and Biomea Fusion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tenaya Therapeutics and Biomea Fusion
The main advantage of trading using opposite Tenaya Therapeutics and Biomea Fusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaya Therapeutics position performs unexpectedly, Biomea Fusion 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 Biomea Fusion will offset losses from the drop in Biomea Fusion's long position.Tenaya Therapeutics vs. Bicycle Therapeutics | Tenaya Therapeutics vs. IGM Biosciences | Tenaya Therapeutics vs. Monte Rosa Therapeutics | Tenaya Therapeutics vs. Stoke Therapeutics |
Biomea Fusion vs. Edgewise Therapeutics | Biomea Fusion vs. Werewolf Therapeutics | Biomea Fusion vs. Cullinan Oncology LLC | Biomea Fusion vs. Design Therapeutics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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