Correlation Between Prime Medicine, and Fate Therapeutics

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

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

Diversification Opportunities for Prime Medicine, and Fate Therapeutics

-0.18

Correlation Coefficient

Prime Medicine,  Fate Therapeutics

Good diversification

The 3 months correlation between Prime and Fate is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Prime Medicine, Common and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics and Prime Medicine, 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 Prime Medicine, Common are associated (or correlated) with Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Prime Medicine, i.e., Prime Medicine, and Fate Therapeutics go up and down completely randomly.

Pair Corralation between Prime Medicine, and Fate Therapeutics

Given the investment horizon of 90 days Prime Medicine, Common is expected to generate 1.53 times more return on investment than Fate Therapeutics. However, Prime Medicine, is 1.53 times more volatile than Fate Therapeutics. It trades about 0.27 of its potential returns per unit of risk. Fate Therapeutics is currently generating about 0.06 per unit of risk. If you would invest  133.00  in Prime Medicine, Common on May 6, 2025 and sell it today you would earn a total of  322.50  from holding Prime Medicine, Common or generate 242.48% return on investment over 90 days.

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

Prime Medicine, Common  vs.  Fate Therapeutics

Prime Medicine, Common

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prime Medicine, Common are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal primary indicators, Prime Medicine, exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fate Therapeutics

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fate Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Fate Therapeutics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prime Medicine, and Fate Therapeutics

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

The idea behind Prime Medicine, Common and Fate 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.