Correlation Between Dyadic International and Protagenic Therapeutics

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

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

Diversification Opportunities for Dyadic International and Protagenic Therapeutics

-0.23

Correlation Coefficient

Dyadic International  Protagenic Therapeutics

Very good diversification

The 3 months correlation between Dyadic and Protagenic is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dyadic International and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic Therapeutics and Dyadic International 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 Dyadic International are associated (or correlated) with Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Dyadic International i.e., Dyadic International and Protagenic Therapeutics go up and down completely randomly.

Pair Corralation between Dyadic International and Protagenic Therapeutics

Given the investment horizon of 90 days Dyadic International is expected to generate 0.96 times more return on investment than Protagenic Therapeutics. However, Dyadic International is 1.04 times less risky than Protagenic Therapeutics. It trades about 0.24 of its potential returns per unit of risk. Protagenic Therapeutics is currently generating about -0.05 per unit of risk. If you would invest  117.00  in Dyadic International on September 17, 2024 and sell it today you would earn a total of  46.00  from holding Dyadic International or generate 39.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dyadic International  vs.  Protagenic Therapeutics

Dyadic International

Risk-Adjusted Performance

7 of 100

OK

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

Protagenic Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dyadic International and Protagenic Therapeutics

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

The idea behind Dyadic International and Protagenic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.