Correlation Between Berkeley Lights and Abcellera Biologics

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Can any of the company-specific risk be diversified away by investing in both Berkeley Lights and Abcellera Biologics 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 Lights and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkeley Lights and Abcellera Biologics, you can compare the effects of market volatilities on Berkeley Lights and Abcellera Biologics 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 Lights with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkeley Lights and Abcellera Biologics.

Diversification Opportunities for Berkeley Lights and Abcellera Biologics

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Berkeley and Abcellera is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley Lights and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Berkeley Lights 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 Lights are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Berkeley Lights i.e., Berkeley Lights and Abcellera Biologics go up and down completely randomly.

Pair Corralation between Berkeley Lights and Abcellera Biologics

Considering the 90-day investment horizon Berkeley Lights is expected to under-perform the Abcellera Biologics. In addition to that, Berkeley Lights is 1.1 times more volatile than Abcellera Biologics. It trades about -0.09 of its total potential returns per unit of risk. Abcellera Biologics is currently generating about -0.05 per unit of volatility. If you would invest  5,890  in Abcellera Biologics on July 1, 2022 and sell it today you would lose (4,905)  from holding Abcellera Biologics or give up 83.28% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy91.15%
ValuesDaily Returns

Berkeley Lights  vs.  Abcellera Biologics

 Performance (%) 
       Timeline  
Berkeley Lights 
Berkeley Performance
0 of 100
Over the last 90 days Berkeley Lights has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Berkeley Price Channel

Abcellera Biologics 
Abcellera Performance
0 of 100
Over the last 90 days Abcellera Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady fundamental indicators, Abcellera Biologics is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Abcellera Price Channel

Berkeley Lights and Abcellera Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Berkeley Lights and Abcellera Biologics

The main advantage of trading using opposite Berkeley Lights and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkeley Lights position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.
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The idea behind Berkeley Lights and Abcellera Biologics 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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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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