Correlation Between Enlivex Therapeutics and Cingulate

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

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

Diversification Opportunities for Enlivex Therapeutics and Cingulate

0.15

Correlation Coefficient

Enlivex Therapeutics  Cingulate

Average diversification

The 3 months correlation between Enlivex and Cingulate is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enlivex Therapeutics and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate and Enlivex 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 Enlivex Therapeutics are associated (or correlated) with Cingulate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate has no effect on the direction of Enlivex Therapeutics i.e., Enlivex Therapeutics and Cingulate go up and down completely randomly.

Pair Corralation between Enlivex Therapeutics and Cingulate

Given the investment horizon of 90 days Enlivex Therapeutics is expected to generate 1.11 times more return on investment than Cingulate. However, Enlivex Therapeutics is 1.11 times more volatile than Cingulate. It trades about 0.06 of its potential returns per unit of risk. Cingulate is currently generating about 0.0 per unit of risk. If you would invest  108.00  in Enlivex Therapeutics on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Enlivex Therapeutics or generate 11.11% return on investment over 90 days.

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

Enlivex Therapeutics  vs.  Cingulate

Enlivex Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enlivex Therapeutics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Enlivex Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Cingulate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cingulate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cingulate is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Enlivex Therapeutics and Cingulate

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

The idea behind Enlivex Therapeutics and Cingulate 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.