Correlation Between Abcellera Biologics and Bolt Biotherapeutics

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

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

Diversification Opportunities for Abcellera Biologics and Bolt Biotherapeutics

0.71

Correlation Coefficient

Abcellera Biologics  Bolt Biotherapeutics

Poor diversification

The 3 months correlation between Abcellera and Bolt is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Abcellera Biologics and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics and Abcellera Biologics 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 Abcellera Biologics are associated (or correlated) with Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Abcellera Biologics i.e., Abcellera Biologics and Bolt Biotherapeutics go up and down completely randomly.

Pair Corralation between Abcellera Biologics and Bolt Biotherapeutics

Given the investment horizon of 90 days Abcellera Biologics is expected to under-perform the Bolt Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Abcellera Biologics is 1.17 times less risky than Bolt Biotherapeutics. The stock trades about -0.07 of its potential returns per unit of risk. The Bolt Biotherapeutics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  139.00  in Bolt Biotherapeutics on July 21, 2024 and sell it today you would lose (76.00) from holding Bolt Biotherapeutics or give up 54.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Abcellera Biologics  vs.  Bolt Biotherapeutics

Abcellera Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abcellera Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Abcellera Biologics is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bolt Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bolt Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in November 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Abcellera Biologics and Bolt Biotherapeutics

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

The idea behind Abcellera Biologics and Bolt Biotherapeutics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.