Correlation Between Actinogen Medical and CSL

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

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

Diversification Opportunities for Actinogen Medical and CSL

0.47

Correlation Coefficient

Actinogen Medical  CSL

Very weak diversification

The 3 months correlation between Actinogen and CSL is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Actinogen Medical and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Actinogen Medical 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 Actinogen Medical are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Actinogen Medical i.e., Actinogen Medical and CSL go up and down completely randomly.

Pair Corralation between Actinogen Medical and CSL

Assuming the 90 days trading horizon Actinogen Medical is expected to under-perform the CSL. In addition to that, Actinogen Medical is 4.79 times more volatile than CSL. It trades about -0.03 of its total potential returns per unit of risk. CSL is currently generating about -0.1 per unit of volatility. If you would invest  30,166  in CSL on September 12, 2024 and sell it today you would lose (1,965) from holding CSL or give up 6.51% of portfolio value over 90 days.

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

Actinogen Medical  vs.  CSL

Actinogen Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Actinogen Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CSL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Actinogen Medical and CSL

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

The idea behind Actinogen Medical and CSL 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.