Correlation Between Exagen and Fate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Exagen 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 Exagen and Fate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exagen Inc and Fate Therapeutics, you can compare the effects of market volatilities on Exagen 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 Exagen with a short position of Fate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exagen and Fate Therapeutics.
Diversification Opportunities for Exagen and Fate Therapeutics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exagen and Fate is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics and Exagen 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 Exagen Inc 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 Exagen i.e., Exagen and Fate Therapeutics go up and down completely randomly.
Pair Corralation between Exagen and Fate Therapeutics
Considering the 90-day investment horizon Exagen Inc is expected to generate 0.91 times more return on investment than Fate Therapeutics. However, Exagen Inc is 1.1 times less risky than Fate Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.17 per unit of risk. If you would invest 405.00 in Exagen Inc on September 25, 2024 and sell it today you would earn a total of 97.00 from holding Exagen Inc or generate 23.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Exagen Inc vs. Fate Therapeutics
Performance |
Timeline |
Exagen Inc |
Fate Therapeutics |
Exagen and Fate Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exagen and Fate Therapeutics
The main advantage of trading using opposite Exagen and Fate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exagen 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.Exagen vs. Fate Therapeutics | Exagen vs. Caribou Biosciences | Exagen vs. Karyopharm Therapeutics | Exagen vs. X4 Pharmaceuticals |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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