Correlation Between Comera Life and Adagene

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

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

Diversification Opportunities for Comera Life and Adagene

-0.47

Correlation Coefficient

Comera Life  Adagene

Very good diversification

The 3 months correlation between Comera and Adagene is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Comera Life Sciences and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Comera Life 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 Comera Life Sciences are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Comera Life i.e., Comera Life and Adagene go up and down completely randomly.

Pair Corralation between Comera Life and Adagene

Given the investment horizon of 90 days Comera Life Sciences is expected to under-perform the Adagene. In addition to that, Comera Life is 1.11 times more volatile than Adagene. It trades about -0.04 of its total potential returns per unit of risk. Adagene is currently generating about 0.04 per unit of volatility. If you would invest  137.00  in Adagene on September 25, 2024 and sell it today you would earn a total of  68.00  from holding Adagene or generate 49.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	28.02%
Values	Daily Returns

Comera Life Sciences  vs.  Adagene

Comera Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comera Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comera Life is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Adagene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adagene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Adagene is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Comera Life and Adagene

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

The idea behind Comera Life Sciences and Adagene 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.