Correlation Between Connect Biopharma and Adicet Bio

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

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

Diversification Opportunities for Connect Biopharma and Adicet Bio

-0.59

Correlation Coefficient

Connect Biopharma  Adicet Bio

Excellent diversification

The 3 months correlation between Connect and Adicet is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Connect Biopharma Holdings and Adicet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adicet Bio and Connect Biopharma 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 Connect Biopharma Holdings are associated (or correlated) with Adicet Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adicet Bio has no effect on the direction of Connect Biopharma i.e., Connect Biopharma and Adicet Bio go up and down completely randomly.

Pair Corralation between Connect Biopharma and Adicet Bio

Given the investment horizon of 90 days Connect Biopharma Holdings is expected to generate 2.27 times more return on investment than Adicet Bio. However, Connect Biopharma is 2.27 times more volatile than Adicet Bio. It trades about 0.33 of its potential returns per unit of risk. Adicet Bio is currently generating about -0.25 per unit of risk. If you would invest  158.00  in Connect Biopharma Holdings on August 30, 2025 and sell it today you would earn a total of  123.00  from holding Connect Biopharma Holdings or generate 77.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Connect Biopharma Holdings  vs.  Adicet Bio

Connect Biopharma

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Connect Biopharma Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Connect Biopharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Adicet Bio

Risk-Adjusted Performance

Weakest

Over the last 90 days Adicet Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Connect Biopharma and Adicet Bio

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

The idea behind Connect Biopharma Holdings and Adicet 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.