Correlation Between Axcella Health and Histogen

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

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

Diversification Opportunities for Axcella Health and Histogen

0.44

Correlation Coefficient

Axcella Health  Histogen

Very weak diversification

The 3 months correlation between Axcella and Histogen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen and Axcella Health 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 Axcella Health are associated (or correlated) with Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Axcella Health i.e., Axcella Health and Histogen go up and down completely randomly.

Pair Corralation between Axcella Health and Histogen

If you would invest  20.00  in Axcella Health on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Axcella Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Axcella Health  vs.  Histogen

Axcella Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axcella Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Axcella Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Histogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Histogen 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 basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Axcella Health and Histogen

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

The idea behind Axcella Health and Histogen 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.