Correlation Between Certara and Simulations Plus

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

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

Diversification Opportunities for Certara and Simulations Plus

0.95

Correlation Coefficient

Certara  Simulations Plus

Almost no diversification

The 3 months correlation between Certara and Simulations is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Certara and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus and Certara 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 Certara are associated (or correlated) with Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of Certara i.e., Certara and Simulations Plus go up and down completely randomly.

Pair Corralation between Certara and Simulations Plus

Given the investment horizon of 90 days Certara is expected to generate 1.03 times more return on investment than Simulations Plus. However, Certara is 1.03 times more volatile than Simulations Plus. It trades about -0.02 of its potential returns per unit of risk. Simulations Plus is currently generating about -0.07 per unit of risk. If you would invest  1,054  in Certara on December 30, 2024 and sell it today you would lose (63.00) from holding Certara or give up 5.98% of portfolio value over 90 days.

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

Certara  vs.  Simulations Plus

Certara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Certara is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Simulations Plus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simulations Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Certara and Simulations Plus

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

The idea behind Certara and Simulations Plus 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.