Correlation Between Crescita Therapeutics and HLS Therapeutics

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

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

Diversification Opportunities for Crescita Therapeutics and HLS Therapeutics

-0.62

Correlation Coefficient

Crescita Therapeutics  HLS Therapeutics

Excellent diversification

The 3 months correlation between Crescita and HLS is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Crescita Therapeutics and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics and Crescita 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 Crescita Therapeutics are associated (or correlated) with HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of Crescita Therapeutics i.e., Crescita Therapeutics and HLS Therapeutics go up and down completely randomly.

Pair Corralation between Crescita Therapeutics and HLS Therapeutics

Assuming the 90 days horizon Crescita Therapeutics is expected to under-perform the HLS Therapeutics. But the pink sheet apears to be less risky and, when comparing its historical volatility, Crescita Therapeutics is 2.14 times less risky than HLS Therapeutics. The pink sheet trades about -0.13 of its potential returns per unit of risk. The HLS Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  269.00  in HLS Therapeutics on December 26, 2024 and sell it today you would earn a total of  46.00  from holding HLS Therapeutics or generate 17.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.32%
Values	Daily Returns

Crescita Therapeutics  vs.  HLS Therapeutics

Crescita Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crescita Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

HLS Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HLS Therapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HLS Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crescita Therapeutics and HLS Therapeutics

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

The idea behind Crescita Therapeutics and HLS Therapeutics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.