Correlation Between Sika AG and Crispr Therapeutics

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

Diversification Opportunities for Sika AG and Crispr Therapeutics

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between SXYAY and Crispr is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sika AG ADR and Crispr Therapeutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crispr Therapeutics and Sika AG 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 Sika AG ADR are associated (or correlated) with Crispr Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crispr Therapeutics has no effect on the direction of Sika AG i.e., Sika AG and Crispr Therapeutics go up and down completely randomly.

Pair Corralation between Sika AG and Crispr Therapeutics

Assuming the 90 days horizon Sika AG ADR is expected to generate 0.51 times more return on investment than Crispr Therapeutics. However, Sika AG ADR is 1.95 times less risky than Crispr Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Crispr Therapeutics AG is currently generating about -0.03 per unit of risk. If you would invest  2,544  in Sika AG ADR on September 2, 2022 and sell it today you would lose (17.00)  from holding Sika AG ADR or give up 0.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Sika AG ADR  vs.  Crispr Therapeutics AG

 Performance (%) 
       Timeline  
Sika AG ADR 
SXYAY Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sika AG ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Sika AG showed solid returns over the last few months and may actually be approaching a breakup point.

SXYAY Price Channel

Crispr Therapeutics 
Crispr Performance
0 of 100
Over the last 90 days Crispr Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm insiders.

Crispr Price Channel

Sika AG and Crispr Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sika AG and Crispr Therapeutics

The main advantage of trading using opposite Sika AG and Crispr Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sika AG position performs unexpectedly, Crispr 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 Crispr Therapeutics will offset losses from the drop in Crispr Therapeutics' long position.
Sika AG vs. Dupont De Nemours
The idea behind Sika AG ADR and Crispr Therapeutics AG 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.
Crispr Therapeutics vs. HP Inc
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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