Correlation Between Checkpoint Therapeutics and Eyenovia

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

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

Diversification Opportunities for Checkpoint Therapeutics and Eyenovia

-0.57

Correlation Coefficient

Checkpoint Therapeutics  Eyenovia

Excellent diversification

The 3 months correlation between Checkpoint and Eyenovia is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Checkpoint Therapeutics and Eyenovia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eyenovia 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 Eyenovia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eyenovia has no effect on the direction of Checkpoint Therapeutics i.e., Checkpoint Therapeutics and Eyenovia go up and down completely randomly.

Pair Corralation between Checkpoint Therapeutics and Eyenovia

Given the investment horizon of 90 days Checkpoint Therapeutics is expected to generate 0.35 times more return on investment than Eyenovia. However, Checkpoint Therapeutics is 2.87 times less risky than Eyenovia. It trades about 0.17 of its potential returns per unit of risk. Eyenovia is currently generating about -0.07 per unit of risk. If you would invest  237.00  in Checkpoint Therapeutics on October 8, 2024 and sell it today you would earn a total of  129.00  from holding Checkpoint Therapeutics or generate 54.43% return on investment over 90 days.

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

Checkpoint Therapeutics  vs.  Eyenovia

Checkpoint Therapeutics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Checkpoint Therapeutics are ranked lower than 13 (%) 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.

Eyenovia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eyenovia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Checkpoint Therapeutics and Eyenovia

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

The idea behind Checkpoint Therapeutics and Eyenovia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.