Correlation Between Dynavax Technologies and Cyclacel Pharmaceuticals

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Can any of the company-specific risk be diversified away by investing in both Dynavax Technologies and Cyclacel Pharmaceuticals 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 Dynavax Technologies and Cyclacel Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynavax Technologies and Cyclacel Pharmaceuticals, you can compare the effects of market volatilities on Dynavax Technologies and Cyclacel Pharmaceuticals 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 Dynavax Technologies with a short position of Cyclacel Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynavax Technologies and Cyclacel Pharmaceuticals.

Diversification Opportunities for Dynavax Technologies and Cyclacel Pharmaceuticals

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Dynavax and Cyclacel is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dynavax Technologies and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals and Dynavax Technologies 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 Dynavax Technologies are associated (or correlated) with Cyclacel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclacel Pharmaceuticals has no effect on the direction of Dynavax Technologies i.e., Dynavax Technologies and Cyclacel Pharmaceuticals go up and down completely randomly.

Pair Corralation between Dynavax Technologies and Cyclacel Pharmaceuticals

Given the investment horizon of 90 days Dynavax Technologies is expected to generate 0.3 times more return on investment than Cyclacel Pharmaceuticals. However, Dynavax Technologies is 3.32 times less risky than Cyclacel Pharmaceuticals. It trades about 0.12 of its potential returns per unit of risk. Cyclacel Pharmaceuticals is currently generating about -0.12 per unit of risk. If you would invest  1,085  in Dynavax Technologies on September 5, 2024 and sell it today you would earn a total of  194.00  from holding Dynavax Technologies or generate 17.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Dynavax Technologies  vs.  Cyclacel Pharmaceuticals

 Performance 
       Timeline  
Dynavax Technologies 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Dynavax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.
Cyclacel Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cyclacel Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dynavax Technologies and Cyclacel Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dynavax Technologies and Cyclacel Pharmaceuticals

The main advantage of trading using opposite Dynavax Technologies and Cyclacel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynavax Technologies position performs unexpectedly, Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals will offset losses from the drop in Cyclacel Pharmaceuticals' long position.
The idea behind Dynavax Technologies and Cyclacel Pharmaceuticals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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