Correlation Between Eupraxia Pharmaceuticals and Cyclacel Pharmaceuticals

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

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

Diversification Opportunities for Eupraxia Pharmaceuticals and Cyclacel Pharmaceuticals

-0.53

Correlation Coefficient

Eupraxia Pharmaceuticals  Cyclacel Pharmaceuticals

Excellent diversification

The 3 months correlation between Eupraxia and Cyclacel is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eupraxia Pharmaceuticals Commo and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals and Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals Common 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 Eupraxia Pharmaceuticals i.e., Eupraxia Pharmaceuticals and Cyclacel Pharmaceuticals go up and down completely randomly.

Pair Corralation between Eupraxia Pharmaceuticals and Cyclacel Pharmaceuticals

Given the investment horizon of 90 days Eupraxia Pharmaceuticals Common is expected to generate 0.65 times more return on investment than Cyclacel Pharmaceuticals. However, Eupraxia Pharmaceuticals Common is 1.53 times less risky than Cyclacel Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Cyclacel Pharmaceuticals is currently generating about 0.02 per unit of risk. If you would invest  295.00  in Eupraxia Pharmaceuticals Common on September 15, 2024 and sell it today you would earn a total of  49.00  from holding Eupraxia Pharmaceuticals Common or generate 16.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	35.77%
Values	Daily Returns

Eupraxia Pharmaceuticals Commo  vs.  Cyclacel Pharmaceuticals

Eupraxia Pharmaceuticals

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eupraxia Pharmaceuticals Common are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Eupraxia Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Cyclacel Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyclacel Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Preferred Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Eupraxia Pharmaceuticals and Cyclacel Pharmaceuticals

The main advantage of trading using opposite Eupraxia Pharmaceuticals and Cyclacel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals Common 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.