Correlation Between Dermata Therapeutics and Presto Automation

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

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

Diversification Opportunities for Dermata Therapeutics and Presto Automation

0.65

Correlation Coefficient

Dermata Therapeutics  Presto Automation

Poor diversification

The 3 months correlation between Dermata and Presto is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dermata Therapeutics and Presto Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Presto Automation and Dermata 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 Dermata Therapeutics are associated (or correlated) with Presto Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Presto Automation has no effect on the direction of Dermata Therapeutics i.e., Dermata Therapeutics and Presto Automation go up and down completely randomly.

Pair Corralation between Dermata Therapeutics and Presto Automation

If you would invest  110.00  in Dermata Therapeutics on September 28, 2024 and sell it today you would earn a total of  24.00  from holding Dermata Therapeutics or generate 21.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Dermata Therapeutics  vs.  Presto Automation

Dermata Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dermata Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Presto Automation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dermata Therapeutics and Presto Automation

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

The idea behind Dermata Therapeutics and Presto Automation 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 Commodity Directory module to find actively traded commodities issued by global exchanges.