Correlation Between NGM Biopharmaceutica and Gracell Biotechnologies
Can any of the company-specific risk be diversified away by investing in both NGM Biopharmaceutica and Gracell Biotechnologies 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 NGM Biopharmaceutica and Gracell Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGM Biopharmaceuticals and Gracell Biotechnologies, you can compare the effects of market volatilities on NGM Biopharmaceutica and Gracell Biotechnologies 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 NGM Biopharmaceutica with a short position of Gracell Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGM Biopharmaceutica and Gracell Biotechnologies.
Diversification Opportunities for NGM Biopharmaceutica and Gracell Biotechnologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NGM and Gracell is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding NGM Biopharmaceuticals and Gracell Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gracell Biotechnologies and NGM Biopharmaceutica 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 NGM Biopharmaceuticals are associated (or correlated) with Gracell Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gracell Biotechnologies has no effect on the direction of NGM Biopharmaceutica i.e., NGM Biopharmaceutica and Gracell Biotechnologies go up and down completely randomly.
Pair Corralation between NGM Biopharmaceutica and Gracell Biotechnologies
If you would invest 402.00 in Gracell Biotechnologies on July 19, 2024 and sell it today you would earn a total of 0.00 from holding Gracell Biotechnologies or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NGM Biopharmaceuticals vs. Gracell Biotechnologies
Performance |
Timeline |
NGM Biopharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NGM Biopharmaceutica and Gracell Biotechnologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NGM Biopharmaceutica and Gracell Biotechnologies
The main advantage of trading using opposite NGM Biopharmaceutica and Gracell Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGM Biopharmaceutica position performs unexpectedly, Gracell Biotechnologies 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 Gracell Biotechnologies will offset losses from the drop in Gracell Biotechnologies' long position.NGM Biopharmaceutica vs. Instil Bio | NGM Biopharmaceutica vs. Achilles Therapeutics PLC | NGM Biopharmaceutica vs. NextCure | NGM Biopharmaceutica vs. Assembly Biosciences |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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