Correlation Between Celcuity LLC and Aldeyra

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

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

Diversification Opportunities for Celcuity LLC and Aldeyra

-0.36

Correlation Coefficient

Celcuity LLC  Aldeyra

Very good diversification

The 3 months correlation between Celcuity and Aldeyra is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Celcuity LLC and Aldeyra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldeyra and Celcuity LLC 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 Celcuity LLC are associated (or correlated) with Aldeyra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldeyra has no effect on the direction of Celcuity LLC i.e., Celcuity LLC and Aldeyra go up and down completely randomly.

Pair Corralation between Celcuity LLC and Aldeyra

Given the investment horizon of 90 days Celcuity LLC is expected to under-perform the Aldeyra. But the stock apears to be less risky and, when comparing its historical volatility, Celcuity LLC is 1.13 times less risky than Aldeyra. The stock trades about -0.06 of its potential returns per unit of risk. The Aldeyra is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  502.00  in Aldeyra on December 29, 2024 and sell it today you would earn a total of  165.00  from holding Aldeyra or generate 32.87% return on investment over 90 days.

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

Celcuity LLC  vs.  Aldeyra

Celcuity LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celcuity LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Aldeyra

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aldeyra are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Aldeyra showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celcuity LLC and Aldeyra

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

The idea behind Celcuity LLC and Aldeyra 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.