Correlation Between ALR Technologies and Cellink AB

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

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

Diversification Opportunities for ALR Technologies and Cellink AB

0.65

Correlation Coefficient

ALR Technologies  Cellink AB

Poor diversification

The 3 months correlation between ALR and Cellink is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ALR Technologies and Cellink AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellink AB and ALR Technologies 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 ALR Technologies are associated (or correlated) with Cellink AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellink AB has no effect on the direction of ALR Technologies i.e., ALR Technologies and Cellink AB go up and down completely randomly.

Pair Corralation between ALR Technologies and Cellink AB

Assuming the 90 days horizon ALR Technologies is expected to generate 4.94 times more return on investment than Cellink AB. However, ALR Technologies is 4.94 times more volatile than Cellink AB. It trades about 0.06 of its potential returns per unit of risk. Cellink AB is currently generating about -0.04 per unit of risk. If you would invest  2.10  in ALR Technologies on September 24, 2024 and sell it today you would lose (1.15) from holding ALR Technologies or give up 54.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.4%
Values	Daily Returns

ALR Technologies  vs.  Cellink AB

ALR Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALR Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, ALR Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cellink AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellink AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ALR Technologies and Cellink AB

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

The idea behind ALR Technologies and Cellink AB 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.