Correlation Between AnaptysBio and Celldex Therapeutics

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

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

Diversification Opportunities for AnaptysBio and Celldex Therapeutics

0.77

Correlation Coefficient

AnaptysBio  Celldex Therapeutics

Poor diversification

The 3 months correlation between AnaptysBio and Celldex is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AnaptysBio and Celldex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celldex Therapeutics and AnaptysBio 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 AnaptysBio are associated (or correlated) with Celldex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celldex Therapeutics has no effect on the direction of AnaptysBio i.e., AnaptysBio and Celldex Therapeutics go up and down completely randomly.

Pair Corralation between AnaptysBio and Celldex Therapeutics

Given the investment horizon of 90 days AnaptysBio is expected to under-perform the Celldex Therapeutics. In addition to that, AnaptysBio is 2.76 times more volatile than Celldex Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Celldex Therapeutics is currently generating about 0.19 per unit of volatility. If you would invest  2,331  in Celldex Therapeutics on September 17, 2024 and sell it today you would earn a total of  289.00  from holding Celldex Therapeutics or generate 12.4% return on investment over 90 days.

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

AnaptysBio  vs.  Celldex Therapeutics

AnaptysBio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Celldex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celldex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly 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.

Pair Trading with AnaptysBio and Celldex Therapeutics

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

The idea behind AnaptysBio and Celldex Therapeutics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.