Correlation Between Assertio Therapeutics and Alpha Teknova

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

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

Diversification Opportunities for Assertio Therapeutics and Alpha Teknova

-0.7

Correlation Coefficient

Assertio Therapeutics  Alpha Teknova

Excellent diversification

The 3 months correlation between Assertio and Alpha is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Assertio Therapeutics and Alpha Teknova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Teknova and Assertio Therapeutics 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 Assertio Therapeutics are associated (or correlated) with Alpha Teknova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Teknova has no effect on the direction of Assertio Therapeutics i.e., Assertio Therapeutics and Alpha Teknova go up and down completely randomly.

Pair Corralation between Assertio Therapeutics and Alpha Teknova

Given the investment horizon of 90 days Assertio Therapeutics is expected to under-perform the Alpha Teknova. But the stock apears to be less risky and, when comparing its historical volatility, Assertio Therapeutics is 1.23 times less risky than Alpha Teknova. The stock trades about -0.01 of its potential returns per unit of risk. The Alpha Teknova is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  692.00  in Alpha Teknova on September 3, 2024 and sell it today you would earn a total of  55.00  from holding Alpha Teknova or generate 7.95% return on investment over 90 days.

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

Assertio Therapeutics  vs.  Alpha Teknova

Assertio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assertio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Assertio Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alpha Teknova

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Teknova are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Alpha Teknova displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assertio Therapeutics and Alpha Teknova

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

The idea behind Assertio Therapeutics and Alpha Teknova 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.