Correlation Between Arcellx and BioRestorative Therapies

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

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

Diversification Opportunities for Arcellx and BioRestorative Therapies

-0.72

Correlation Coefficient

Arcellx  BioRestorative Therapies

Pay attention - limited upside

The 3 months correlation between Arcellx and BioRestorative is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Arcellx and BioRestorative Therapies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioRestorative Therapies and Arcellx 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 Arcellx are associated (or correlated) with BioRestorative Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioRestorative Therapies has no effect on the direction of Arcellx i.e., Arcellx and BioRestorative Therapies go up and down completely randomly.

Pair Corralation between Arcellx and BioRestorative Therapies

Given the investment horizon of 90 days Arcellx is expected to generate 0.51 times more return on investment than BioRestorative Therapies. However, Arcellx is 1.97 times less risky than BioRestorative Therapies. It trades about 0.06 of its potential returns per unit of risk. BioRestorative Therapies is currently generating about 0.03 per unit of risk. If you would invest  3,569  in Arcellx on December 2, 2024 and sell it today you would earn a total of  2,913  from holding Arcellx or generate 81.62% return on investment over 90 days.

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

Arcellx  vs.  BioRestorative Therapies

Arcellx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arcellx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BioRestorative Therapies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioRestorative Therapies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, BioRestorative Therapies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arcellx and BioRestorative Therapies

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

The idea behind Arcellx and BioRestorative Therapies 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.