Correlation Between Checkpoint Therapeutics and Aldeyra

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

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

Diversification Opportunities for Checkpoint Therapeutics and Aldeyra

-0.62

Correlation Coefficient

Checkpoint Therapeutics  Aldeyra

Excellent diversification

The 3 months correlation between Checkpoint and Aldeyra is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Checkpoint Therapeutics and Aldeyra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldeyra and Checkpoint Therapeutics 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 Checkpoint Therapeutics are associated (or correlated) with Aldeyra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldeyra has no effect on the direction of Checkpoint Therapeutics i.e., Checkpoint Therapeutics and Aldeyra go up and down completely randomly.

Pair Corralation between Checkpoint Therapeutics and Aldeyra

Given the investment horizon of 90 days Checkpoint Therapeutics is expected to generate 1.06 times more return on investment than Aldeyra. However, Checkpoint Therapeutics is 1.06 times more volatile than Aldeyra. It trades about 0.29 of its potential returns per unit of risk. Aldeyra is currently generating about -0.05 per unit of risk. If you would invest  221.00  in Checkpoint Therapeutics on September 2, 2024 and sell it today you would earn a total of  218.00  from holding Checkpoint Therapeutics or generate 98.64% return on investment over 90 days.

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

Checkpoint Therapeutics  vs.  Aldeyra

Checkpoint Therapeutics

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Checkpoint Therapeutics are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Checkpoint Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aldeyra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aldeyra has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Checkpoint Therapeutics and Aldeyra

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

The idea behind Checkpoint Therapeutics and Aldeyra 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.