Correlation Between CEL SCI and Northwest Biotherapeutics

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

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

Diversification Opportunities for CEL SCI and Northwest Biotherapeutics

0.67

Correlation Coefficient

CEL SCI  Northwest Biotherapeutics

Poor diversification

The 3 months correlation between CEL and Northwest is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CEL SCI Corp and Northwest Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Biotherapeutics and CEL SCI 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 CEL SCI Corp are associated (or correlated) with Northwest Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Biotherapeutics has no effect on the direction of CEL SCI i.e., CEL SCI and Northwest Biotherapeutics go up and down completely randomly.

Pair Corralation between CEL SCI and Northwest Biotherapeutics

Considering the 90-day investment horizon CEL SCI Corp is expected to generate 1.93 times more return on investment than Northwest Biotherapeutics. However, CEL SCI is 1.93 times more volatile than Northwest Biotherapeutics. It trades about 0.14 of its potential returns per unit of risk. Northwest Biotherapeutics is currently generating about 0.06 per unit of risk. If you would invest  56.00  in CEL SCI Corp on September 17, 2024 and sell it today you would earn a total of  10.99  from holding CEL SCI Corp or generate 19.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

CEL SCI Corp  vs.  Northwest Biotherapeutics

CEL SCI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEL SCI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Northwest Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northwest Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Northwest Biotherapeutics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CEL SCI and Northwest Biotherapeutics

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

The idea behind CEL SCI Corp and Northwest Biotherapeutics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.