Correlation Between Checkpoint Therapeutics and Cyclacel Pharmaceuticals

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

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

Diversification Opportunities for Checkpoint Therapeutics and Cyclacel Pharmaceuticals

0.06

Correlation Coefficient

Checkpoint Therapeutics  Cyclacel Pharmaceuticals

Significant diversification

The 3 months correlation between Checkpoint and Cyclacel is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Checkpoint Therapeutics and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclacel Pharmaceuticals has no effect on the direction of Checkpoint Therapeutics i.e., Checkpoint Therapeutics and Cyclacel Pharmaceuticals go up and down completely randomly.

Pair Corralation between Checkpoint Therapeutics and Cyclacel Pharmaceuticals

Given the investment horizon of 90 days Checkpoint Therapeutics is expected to under-perform the Cyclacel Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Checkpoint Therapeutics is 1.82 times less risky than Cyclacel Pharmaceuticals. The stock trades about -0.12 of its potential returns per unit of risk. The Cyclacel Pharmaceuticals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  698.00  in Cyclacel Pharmaceuticals on December 4, 2024 and sell it today you would earn a total of  226.00  from holding Cyclacel Pharmaceuticals or generate 32.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Checkpoint Therapeutics  vs.  Cyclacel Pharmaceuticals

Checkpoint Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Checkpoint Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cyclacel Pharmaceuticals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cyclacel Pharmaceuticals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, Cyclacel Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Checkpoint Therapeutics and Cyclacel Pharmaceuticals

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

The idea behind Checkpoint Therapeutics and Cyclacel 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.