Correlation Between Combigene and Elicera Therapeutics

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

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

Diversification Opportunities for Combigene and Elicera Therapeutics

-0.3

Correlation Coefficient

Combigene  Elicera Therapeutics

Very good diversification

The 3 months correlation between Combigene and Elicera is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Combigene AB and Elicera Therapeutics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicera Therapeutics and Combigene 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 Combigene AB are associated (or correlated) with Elicera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicera Therapeutics has no effect on the direction of Combigene i.e., Combigene and Elicera Therapeutics go up and down completely randomly.

Pair Corralation between Combigene and Elicera Therapeutics

Assuming the 90 days trading horizon Combigene is expected to generate 2.91 times less return on investment than Elicera Therapeutics. In addition to that, Combigene is 1.83 times more volatile than Elicera Therapeutics AB. It trades about 0.03 of its total potential returns per unit of risk. Elicera Therapeutics AB is currently generating about 0.14 per unit of volatility. If you would invest  138.00  in Elicera Therapeutics AB on October 8, 2024 and sell it today you would earn a total of  51.00  from holding Elicera Therapeutics AB or generate 36.96% return on investment over 90 days.

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

Combigene AB  vs.  Elicera Therapeutics AB

Combigene AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Combigene AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Combigene unveiled solid returns over the last few months and may actually be approaching a breakup point.

Elicera Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elicera Therapeutics AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Elicera Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Combigene and Elicera Therapeutics

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

The idea behind Combigene AB and Elicera Therapeutics AB 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.