Correlation Between Combigene and Fluicell

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

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

Diversification Opportunities for Combigene and Fluicell

-0.25

Correlation Coefficient

Combigene  Fluicell

Very good diversification

The 3 months correlation between Combigene and Fluicell is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Combigene AB and Fluicell AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluicell AB 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 Fluicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluicell AB has no effect on the direction of Combigene i.e., Combigene and Fluicell go up and down completely randomly.

Pair Corralation between Combigene and Fluicell

Assuming the 90 days trading horizon Combigene is expected to generate 193.87 times less return on investment than Fluicell. But when comparing it to its historical volatility, Combigene AB is 3.33 times less risky than Fluicell. It trades about 0.0 of its potential returns per unit of risk. Fluicell AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.10  in Fluicell AB on December 24, 2024 and sell it today you would earn a total of  2.02  from holding Fluicell AB or generate 65.16% 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.  Fluicell AB

Combigene AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Combigene AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Combigene is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fluicell AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fluicell AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fluicell unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Combigene and Fluicell

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

The idea behind Combigene AB and Fluicell 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.