Correlation Between Equillium and Cingulate Warrants

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

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

Diversification Opportunities for Equillium and Cingulate Warrants

-0.32

Correlation Coefficient

Equillium  Cingulate Warrants

Very good diversification

The 3 months correlation between Equillium and Cingulate is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Cingulate Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate Warrants 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 Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate Warrants has no effect on the direction of Equillium i.e., Equillium and Cingulate Warrants go up and down completely randomly.

Pair Corralation between Equillium and Cingulate Warrants

Allowing for the 90-day total investment horizon Equillium is expected to under-perform the Cingulate Warrants. But the stock apears to be less risky and, when comparing its historical volatility, Equillium is 2.44 times less risky than Cingulate Warrants. The stock trades about -0.08 of its potential returns per unit of risk. The Cingulate Warrants is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.13  in Cingulate Warrants on December 30, 2024 and sell it today you would earn a total of  0.08  from holding Cingulate Warrants or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Equillium  vs.  Cingulate Warrants

Equillium

Risk-Adjusted Performance

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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Cingulate Warrants

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equillium and Cingulate Warrants

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

The idea behind Equillium and Cingulate Warrants 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.