Correlation Between Celcuity LLC and Monte Rosa

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

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

Diversification Opportunities for Celcuity LLC and Monte Rosa

-0.26

Correlation Coefficient

Celcuity LLC  Monte Rosa

Very good diversification

The 3 months correlation between Celcuity and Monte is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Celcuity LLC and Monte Rosa Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monte Rosa 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 Monte Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monte Rosa Therapeutics has no effect on the direction of Celcuity LLC i.e., Celcuity LLC and Monte Rosa go up and down completely randomly.

Pair Corralation between Celcuity LLC and Monte Rosa

Given the investment horizon of 90 days Celcuity LLC is expected to under-perform the Monte Rosa. But the stock apears to be less risky and, when comparing its historical volatility, Celcuity LLC is 4.16 times less risky than Monte Rosa. The stock trades about -0.09 of its potential returns per unit of risk. The Monte Rosa Therapeutics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  582.00  in Monte Rosa Therapeutics on September 2, 2024 and sell it today you would earn a total of  454.00  from holding Monte Rosa Therapeutics or generate 78.01% 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.  Monte Rosa 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 conflicting performance in the last few months, the Stock's essential 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.

Monte Rosa Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monte Rosa Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Monte Rosa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celcuity LLC and Monte Rosa

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

The idea behind Celcuity LLC and Monte Rosa 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.