Correlation Between Equillium and Cingulate

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

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

Diversification Opportunities for Equillium and Cingulate

0.11

Correlation Coefficient

Equillium  Cingulate

Average diversification

The 3 months correlation between Equillium and Cingulate is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate and Equillium 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 Equillium 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 Equillium i.e., Equillium and Cingulate go up and down completely randomly.

Pair Corralation between Equillium and Cingulate

Allowing for the 90-day total investment horizon Equillium is expected to under-perform the Cingulate. But the stock apears to be less risky and, when comparing its historical volatility, Equillium is 3.41 times less risky than Cingulate. The stock trades about -0.06 of its potential returns per unit of risk. The Cingulate is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,260  in Cingulate on October 22, 2024 and sell it today you would lose (784.00) from holding Cingulate or give up 62.22% of portfolio value over 90 days.

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

Equillium  vs.  Cingulate

Equillium

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cingulate

Risk-Adjusted Performance

0 of 100

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 Equillium and Cingulate

The main advantage of trading using opposite Equillium and Cingulate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium 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 Equillium 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.