Correlation Between Celldex Therapeutics and Agios Pharm

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

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

Diversification Opportunities for Celldex Therapeutics and Agios Pharm

0.5

Correlation Coefficient

Celldex Therapeutics  Agios Pharm

Very weak diversification

The 3 months correlation between Celldex and Agios is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Celldex Therapeutics and Agios Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agios Pharm and Celldex 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 Celldex Therapeutics are associated (or correlated) with Agios Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agios Pharm has no effect on the direction of Celldex Therapeutics i.e., Celldex Therapeutics and Agios Pharm go up and down completely randomly.

Pair Corralation between Celldex Therapeutics and Agios Pharm

Given the investment horizon of 90 days Celldex Therapeutics is expected to under-perform the Agios Pharm. In addition to that, Celldex Therapeutics is 1.22 times more volatile than Agios Pharm. It trades about -0.11 of its total potential returns per unit of risk. Agios Pharm is currently generating about -0.03 per unit of volatility. If you would invest  3,303  in Agios Pharm on December 28, 2024 and sell it today you would lose (219.00) from holding Agios Pharm or give up 6.63% of portfolio value over 90 days.

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

Celldex Therapeutics  vs.  Agios Pharm

Celldex Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celldex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Agios Pharm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agios Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Agios Pharm is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Celldex Therapeutics and Agios Pharm

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

The idea behind Celldex Therapeutics and Agios Pharm 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.