Correlation Between Centessa Pharmaceuticals and CHKEZ Old

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

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

Diversification Opportunities for Centessa Pharmaceuticals and CHKEZ Old

-0.71

Correlation Coefficient

Centessa Pharmaceuticals  CHKEZ Old

Pay attention - limited upside

The 3 months correlation between Centessa and CHKEZ is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC are associated (or correlated) with CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and CHKEZ Old go up and down completely randomly.

Pair Corralation between Centessa Pharmaceuticals and CHKEZ Old

Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 2.12 times more return on investment than CHKEZ Old. However, Centessa Pharmaceuticals is 2.12 times more volatile than CHKEZ Old. It trades about 0.09 of its potential returns per unit of risk. CHKEZ Old is currently generating about 0.0 per unit of risk. If you would invest  392.00  in Centessa Pharmaceuticals PLC on October 11, 2024 and sell it today you would earn a total of  1,218  from holding Centessa Pharmaceuticals PLC or generate 310.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.29%
Values	Daily Returns

Centessa Pharmaceuticals PLC  vs.  CHKEZ Old

Centessa Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Centessa Pharmaceuticals PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Centessa Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CHKEZ Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, CHKEZ Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Centessa Pharmaceuticals and CHKEZ Old

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

The idea behind Centessa Pharmaceuticals PLC and CHKEZ Old 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.