Correlation Between WOOJUNG BIO and Cytogen

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

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

Diversification Opportunities for WOOJUNG BIO and Cytogen

0.54

Correlation Coefficient

WOOJUNG BIO  Cytogen

Very weak diversification

The 3 months correlation between WOOJUNG and Cytogen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding WOOJUNG BIO and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen and WOOJUNG BIO 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 WOOJUNG BIO are associated (or correlated) with Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of WOOJUNG BIO i.e., WOOJUNG BIO and Cytogen go up and down completely randomly.

Pair Corralation between WOOJUNG BIO and Cytogen

Assuming the 90 days trading horizon WOOJUNG BIO is expected to under-perform the Cytogen. But the stock apears to be less risky and, when comparing its historical volatility, WOOJUNG BIO is 1.83 times less risky than Cytogen. The stock trades about -0.15 of its potential returns per unit of risk. The Cytogen is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  680,000  in Cytogen on September 24, 2024 and sell it today you would lose (132,000) from holding Cytogen or give up 19.41% of portfolio value over 90 days.

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

WOOJUNG BIO  vs.  Cytogen

WOOJUNG BIO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WOOJUNG BIO 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cytogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Pair Trading with WOOJUNG BIO and Cytogen

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

The idea behind WOOJUNG BIO and Cytogen 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..