Correlation Between Berkeley LightsInc and Mustang Bio

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

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

Diversification Opportunities for Berkeley LightsInc and Mustang Bio

0.9

Correlation Coefficient

Berkeley LightsInc  Mustang Bio

Almost no diversification

The 3 months correlation between Berkeley and Mustang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley LightsInc and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio and Berkeley LightsInc 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 Berkeley LightsInc are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of Berkeley LightsInc i.e., Berkeley LightsInc and Mustang Bio go up and down completely randomly.

Pair Corralation between Berkeley LightsInc and Mustang Bio

If you would invest  120.00  in Berkeley LightsInc on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Berkeley LightsInc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	4.76%
Values	Daily Returns

Berkeley LightsInc  vs.  Mustang Bio

Berkeley LightsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Berkeley LightsInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Berkeley LightsInc is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Mustang Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mustang Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Berkeley LightsInc and Mustang Bio

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

The idea behind Berkeley LightsInc and Mustang 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.