Correlation Between Cantargia and Elicera Therapeutics

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

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

Diversification Opportunities for Cantargia and Elicera Therapeutics

-0.4

Correlation Coefficient

Cantargia  Elicera Therapeutics

Very good diversification

The 3 months correlation between Cantargia and Elicera is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Elicera Therapeutics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicera Therapeutics and Cantargia 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 Cantargia AB are associated (or correlated) with Elicera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicera Therapeutics has no effect on the direction of Cantargia i.e., Cantargia and Elicera Therapeutics go up and down completely randomly.

Pair Corralation between Cantargia and Elicera Therapeutics

Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Elicera Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Cantargia AB is 3.04 times less risky than Elicera Therapeutics. The stock trades about -0.19 of its potential returns per unit of risk. The Elicera Therapeutics AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  167.00  in Elicera Therapeutics AB on October 10, 2024 and sell it today you would earn a total of  22.00  from holding Elicera Therapeutics AB or generate 13.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Cantargia AB  vs.  Elicera Therapeutics AB

Cantargia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantargia AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Elicera Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elicera Therapeutics AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Elicera Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantargia and Elicera Therapeutics

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

The idea behind Cantargia AB and Elicera Therapeutics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..