Correlation Between ChitogenX and Small Pharma

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

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

Diversification Opportunities for ChitogenX and Small Pharma

0.0

Correlation Coefficient

ChitogenX  Small Pharma

Pay attention - limited upside

The 3 months correlation between ChitogenX and Small is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ChitogenX and Small Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Pharma and ChitogenX 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 ChitogenX are associated (or correlated) with Small Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Pharma has no effect on the direction of ChitogenX i.e., ChitogenX and Small Pharma go up and down completely randomly.

Pair Corralation between ChitogenX and Small Pharma

If you would invest (100.00) in Small Pharma on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Small Pharma or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ChitogenX  vs.  Small Pharma

ChitogenX

Risk-Adjusted Performance

Very Weak

Over the last 90 days ChitogenX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Small Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Small Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Small Pharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ChitogenX and Small Pharma

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

The idea behind ChitogenX and Small Pharma 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.