Correlation Between Celcuity LLC and Fate Therapeutics

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

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

Diversification Opportunities for Celcuity LLC and Fate Therapeutics

0.59

Correlation Coefficient

Celcuity LLC  Fate Therapeutics

Very weak diversification

The 3 months correlation between Celcuity and Fate is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Celcuity LLC and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics 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 Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Celcuity LLC i.e., Celcuity LLC and Fate Therapeutics go up and down completely randomly.

Pair Corralation between Celcuity LLC and Fate Therapeutics

Given the investment horizon of 90 days Celcuity LLC is expected to generate 0.61 times more return on investment than Fate Therapeutics. However, Celcuity LLC is 1.64 times less risky than Fate Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.02 per unit of risk. If you would invest  1,082  in Celcuity LLC on September 30, 2024 and sell it today you would earn a total of  302.00  from holding Celcuity LLC or generate 27.91% return on investment over 90 days.

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

Celcuity LLC  vs.  Fate Therapeutics

Celcuity LLC

Risk-Adjusted Performance

0 of 100

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 rather sound essential indicators, Celcuity LLC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fate Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fate Therapeutics 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 rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Celcuity LLC and Fate Therapeutics

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

The idea behind Celcuity LLC and Fate 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.