Correlation Between ChitogenX and PhaseBio Pharmaceuticals

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

By analyzing existing cross correlation between ChitogenX and PhaseBio Pharmaceuticals, you can compare the effects of market volatilities on ChitogenX and PhaseBio Pharmaceuticals 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 PhaseBio Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChitogenX and PhaseBio Pharmaceuticals.

Diversification Opportunities for ChitogenX and PhaseBio Pharmaceuticals

0.0

Correlation Coefficient

ChitogenX  PhaseBio Pharmaceuticals

Pay attention - limited upside

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

Pair Corralation between ChitogenX and PhaseBio Pharmaceuticals

If you would invest  0.51  in ChitogenX on December 3, 2024 and sell it today you would earn a total of  0.20  from holding ChitogenX or generate 39.22% return on investment over 90 days.

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

ChitogenX  vs.  PhaseBio Pharmaceuticals

ChitogenX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ChitogenX are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ChitogenX reported solid returns over the last few months and may actually be approaching a breakup point.

PhaseBio Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days PhaseBio Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, PhaseBio Pharmaceuticals is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ChitogenX and PhaseBio Pharmaceuticals

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

The idea behind ChitogenX and PhaseBio Pharmaceuticals 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.