Correlation Between Natera and Intellia Therapeutics

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

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

Diversification Opportunities for Natera and Intellia Therapeutics

-0.59

Correlation Coefficient

Natera  Intellia Therapeutics

Excellent diversification

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

Pair Corralation between Natera and Intellia Therapeutics

Given the investment horizon of 90 days Natera Inc is expected to under-perform the Intellia Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Natera Inc is 2.47 times less risky than Intellia Therapeutics. The stock trades about -0.08 of its potential returns per unit of risk. The Intellia Therapeutics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  725.00  in Intellia Therapeutics on May 6, 2025 and sell it today you would earn a total of  487.00  from holding Intellia Therapeutics or generate 67.17% return on investment over 90 days.

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

Natera Inc  vs.  Intellia Therapeutics

Natera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intellia Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intellia Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Intellia Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Natera and Intellia Therapeutics

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

The idea behind Natera Inc and Intellia Therapeutics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.