Correlation Between Caribou Biosciences and CSL

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

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

Diversification Opportunities for Caribou Biosciences and CSL

0.58

Correlation Coefficient

Caribou Biosciences  CSL

Very weak diversification

The 3 months correlation between Caribou and CSL is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and Caribou 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 Caribou Biosciences are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Caribou Biosciences i.e., Caribou Biosciences and CSL go up and down completely randomly.

Pair Corralation between Caribou Biosciences and CSL

Given the investment horizon of 90 days Caribou Biosciences is expected to generate 1.72 times more return on investment than CSL. However, Caribou Biosciences is 1.72 times more volatile than CSL Limited. It trades about 0.22 of its potential returns per unit of risk. CSL Limited is currently generating about 0.06 per unit of risk. If you would invest  86.00  in Caribou Biosciences on May 5, 2025 and sell it today you would earn a total of  109.00  from holding Caribou Biosciences or generate 126.74% return on investment over 90 days.

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

Caribou Biosciences  vs.  CSL Limited

Caribou Biosciences

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caribou Biosciences are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Caribou Biosciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

CSL Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSL Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, CSL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caribou Biosciences and CSL

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

The idea behind Caribou Biosciences and CSL Limited 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.