Correlation Between Beam Therapeutics and Progyny

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

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

Diversification Opportunities for Beam Therapeutics and Progyny

0.7

Correlation Coefficient

Beam Therapeutics  Progyny

Poor diversification

The 3 months correlation between Beam and Progyny is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics and Progyny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progyny and Beam 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 Beam Therapeutics are associated (or correlated) with Progyny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progyny has no effect on the direction of Beam Therapeutics i.e., Beam Therapeutics and Progyny go up and down completely randomly.

Pair Corralation between Beam Therapeutics and Progyny

Given the investment horizon of 90 days Beam Therapeutics is expected to generate 1.25 times more return on investment than Progyny. However, Beam Therapeutics is 1.25 times more volatile than Progyny. It trades about 0.1 of its potential returns per unit of risk. Progyny is currently generating about 0.01 per unit of risk. If you would invest  1,599  in Beam Therapeutics on May 6, 2025 and sell it today you would earn a total of  313.00  from holding Beam Therapeutics or generate 19.57% return on investment over 90 days.

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

Beam Therapeutics  vs.  Progyny

Beam Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Beam Therapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Beam Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Progyny

Risk-Adjusted Performance

Very Weak

Over the last 90 days Progyny has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Progyny is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Beam Therapeutics and Progyny

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

The idea behind Beam Therapeutics and Progyny 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..