Correlation Between Estrella Immunopharma and Altamira Therapeutics

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

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

Diversification Opportunities for Estrella Immunopharma and Altamira Therapeutics

-0.45

Correlation Coefficient

Estrella Immunopharma  Altamira Therapeutics

Very good diversification

The 3 months correlation between Estrella and Altamira is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Estrella Immunopharma and Altamira Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamira Therapeutics and Estrella Immunopharma 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 Estrella Immunopharma are associated (or correlated) with Altamira Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamira Therapeutics has no effect on the direction of Estrella Immunopharma i.e., Estrella Immunopharma and Altamira Therapeutics go up and down completely randomly.

Pair Corralation between Estrella Immunopharma and Altamira Therapeutics

Assuming the 90 days horizon Estrella Immunopharma is expected to generate 7.88 times more return on investment than Altamira Therapeutics. However, Estrella Immunopharma is 7.88 times more volatile than Altamira Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Altamira Therapeutics is currently generating about -0.24 per unit of risk. If you would invest  10.00  in Estrella Immunopharma on August 30, 2024 and sell it today you would lose (0.90) from holding Estrella Immunopharma or give up 9.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	34.92%
Values	Daily Returns

Estrella Immunopharma  vs.  Altamira Therapeutics

Estrella Immunopharma

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Estrella Immunopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Altamira Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altamira Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Estrella Immunopharma and Altamira Therapeutics

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

The idea behind Estrella Immunopharma and Altamira 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.