Correlation Between Gamida Cell and PDS Biotechnology
Can any of the company-specific risk be diversified away by investing in both Gamida Cell and PDS Biotechnology 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 Gamida Cell and PDS Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamida Cell and PDS Biotechnology Corp, you can compare the effects of market volatilities on Gamida Cell and PDS Biotechnology 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 Gamida Cell with a short position of PDS Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamida Cell and PDS Biotechnology.
Diversification Opportunities for Gamida Cell and PDS Biotechnology
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamida and PDS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gamida Cell and PDS Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDS Biotechnology Corp and Gamida Cell 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 Gamida Cell are associated (or correlated) with PDS Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDS Biotechnology Corp has no effect on the direction of Gamida Cell i.e., Gamida Cell and PDS Biotechnology go up and down completely randomly.
Pair Corralation between Gamida Cell and PDS Biotechnology
Given the investment horizon of 90 days Gamida Cell is expected to under-perform the PDS Biotechnology. In addition to that, Gamida Cell is 1.61 times more volatile than PDS Biotechnology Corp. It trades about -0.05 of its total potential returns per unit of risk. PDS Biotechnology Corp is currently generating about 0.02 per unit of volatility. If you would invest 371.00 in PDS Biotechnology Corp on February 21, 2024 and sell it today you would lose (33.00) from holding PDS Biotechnology Corp or give up 8.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.98% |
Values | Daily Returns |
Gamida Cell vs. PDS Biotechnology Corp
Performance |
Timeline |
Gamida Cell |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PDS Biotechnology Corp |
Gamida Cell and PDS Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gamida Cell and PDS Biotechnology
The main advantage of trading using opposite Gamida Cell and PDS Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamida Cell position performs unexpectedly, PDS Biotechnology 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 PDS Biotechnology will offset losses from the drop in PDS Biotechnology's long position.Gamida Cell vs. BlackRock Science Tech | Gamida Cell vs. Blackrock Innovation Growth | Gamida Cell vs. Virtus Allianzgi Artificial | Gamida Cell vs. Highland Floating Rate |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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