Correlation Between Assembly Biosciences and Instil Bio

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

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

Diversification Opportunities for Assembly Biosciences and Instil Bio

0.77

Correlation Coefficient

Assembly Biosciences  Instil Bio

Poor diversification

The 3 months correlation between Assembly and Instil is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Assembly Biosciences 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 Assembly Biosciences are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and Instil Bio go up and down completely randomly.

Pair Corralation between Assembly Biosciences and Instil Bio

Given the investment horizon of 90 days Assembly Biosciences is expected to generate 7.17 times less return on investment than Instil Bio. But when comparing it to its historical volatility, Assembly Biosciences is 8.52 times less risky than Instil Bio. It trades about 0.48 of its potential returns per unit of risk. Instil Bio is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  1,355  in Instil Bio on June 24, 2024 and sell it today you would earn a total of  5,270  from holding Instil Bio or generate 388.93% return on investment over 90 days.

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

Assembly Biosciences  vs.  Instil Bio

Assembly Biosciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assembly Biosciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Assembly Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Instil Bio

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assembly Biosciences and Instil Bio

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

The idea behind Assembly Biosciences and Instil Bio 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.