Correlation Between Beam TherapeuticsInc and CSL
Can any of the company-specific risk be diversified away by investing in both Beam TherapeuticsInc and CSL 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 Beam TherapeuticsInc and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam TherapeuticsInc and CSL, you can compare the effects of market volatilities on Beam TherapeuticsInc and CSL 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 Beam TherapeuticsInc with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam TherapeuticsInc and CSL.
Diversification Opportunities for Beam TherapeuticsInc and CSL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beam and CSL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Beam TherapeuticsInc and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Beam TherapeuticsInc 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 Beam TherapeuticsInc are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Beam TherapeuticsInc i.e., Beam TherapeuticsInc and CSL go up and down completely randomly.
Pair Corralation between Beam TherapeuticsInc and CSL
Given the investment horizon of 90 days Beam TherapeuticsInc is expected to under-perform the CSL. In addition to that, Beam TherapeuticsInc is 3.67 times more volatile than CSL. It trades about -0.4 of its total potential returns per unit of risk. CSL is currently generating about 0.08 per unit of volatility. If you would invest 9,287 in CSL on December 29, 2023 and sell it today you would earn a total of 142.00 from holding CSL or generate 1.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beam TherapeuticsInc vs. CSL
Performance |
Timeline |
Beam TherapeuticsInc |
CSL |
Beam TherapeuticsInc and CSL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beam TherapeuticsInc and CSL
The main advantage of trading using opposite Beam TherapeuticsInc and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam TherapeuticsInc position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.Beam TherapeuticsInc vs. Entegris | Beam TherapeuticsInc vs. Vishay Intertechnology | Beam TherapeuticsInc vs. Hawaiian Holdings | Beam TherapeuticsInc vs. Cirrus Logic |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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