Correlation Between Fate Therapeutics and CohBar

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

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

Diversification Opportunities for Fate Therapeutics and CohBar

-0.68

Correlation Coefficient

Fate Therapeutics  CohBar

Excellent diversification

The 3 months correlation between Fate and CohBar is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fate Therapeutics and CohBar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CohBar Inc and Fate 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 Fate Therapeutics are associated (or correlated) with CohBar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CohBar Inc has no effect on the direction of Fate Therapeutics i.e., Fate Therapeutics and CohBar go up and down completely randomly.

Pair Corralation between Fate Therapeutics and CohBar

If you would invest  249.00  in Fate Therapeutics on August 31, 2024 and sell it today you would earn a total of  68.00  from holding Fate Therapeutics or generate 27.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Fate Therapeutics  vs.  CohBar Inc

Fate Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fate Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Fate Therapeutics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CohBar Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CohBar Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, CohBar is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Fate Therapeutics and CohBar

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

The idea behind Fate Therapeutics and CohBar Inc 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.