Correlation Between Eton Pharmaceuticals and Precigen

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

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

Diversification Opportunities for Eton Pharmaceuticals and Precigen

-0.05

Correlation Coefficient

Eton Pharmaceuticals  Precigen

Good diversification

The 3 months correlation between Eton and Precigen is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eton Pharmaceuticals and Precigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precigen and Eton 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 Eton Pharmaceuticals are associated (or correlated) with Precigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precigen has no effect on the direction of Eton Pharmaceuticals i.e., Eton Pharmaceuticals and Precigen go up and down completely randomly.

Pair Corralation between Eton Pharmaceuticals and Precigen

Given the investment horizon of 90 days Eton Pharmaceuticals is expected to under-perform the Precigen. But the stock apears to be less risky and, when comparing its historical volatility, Eton Pharmaceuticals is 2.07 times less risky than Precigen. The stock trades about -0.01 of its potential returns per unit of risk. The Precigen is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  80.00  in Precigen on October 10, 2024 and sell it today you would earn a total of  52.00  from holding Precigen or generate 65.0% return on investment over 90 days.

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

Eton Pharmaceuticals  vs.  Precigen

Eton Pharmaceuticals

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eton Pharmaceuticals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Eton Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Precigen

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Precigen are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Precigen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eton Pharmaceuticals and Precigen

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

The idea behind Eton Pharmaceuticals and Precigen 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.