Correlation Between Eyepoint Pharmaceuticals and Checkpoint Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Eyepoint Pharmaceuticals and Checkpoint 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 Eyepoint Pharmaceuticals and Checkpoint Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eyepoint Pharmaceuticals and Checkpoint Therapeutics, you can compare the effects of market volatilities on Eyepoint Pharmaceuticals and Checkpoint 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 Eyepoint Pharmaceuticals with a short position of Checkpoint Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eyepoint Pharmaceuticals and Checkpoint Therapeutics.

Diversification Opportunities for Eyepoint Pharmaceuticals and Checkpoint Therapeutics

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Eyepoint and Checkpoint is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Eyepoint Pharmaceuticals and Checkpoint Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Checkpoint Therapeutics and Eyepoint 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 Eyepoint Pharmaceuticals are associated (or correlated) with Checkpoint Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Checkpoint Therapeutics has no effect on the direction of Eyepoint Pharmaceuticals i.e., Eyepoint Pharmaceuticals and Checkpoint Therapeutics go up and down completely randomly.

Pair Corralation between Eyepoint Pharmaceuticals and Checkpoint Therapeutics

Given the investment horizon of 90 days Eyepoint Pharmaceuticals is expected to under-perform the Checkpoint Therapeutics. In addition to that, Eyepoint Pharmaceuticals is 1.22 times more volatile than Checkpoint Therapeutics. It trades about -0.05 of its total potential returns per unit of risk. Checkpoint Therapeutics is currently generating about 0.0 per unit of volatility. If you would invest  341.00  in Checkpoint Therapeutics on October 23, 2024 and sell it today you would lose (23.00) from holding Checkpoint Therapeutics or give up 6.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.36%
ValuesDaily Returns

Eyepoint Pharmaceuticals  vs.  Checkpoint Therapeutics

 Performance 
       Timeline  
Eyepoint Pharmaceuticals 

Risk-Adjusted Performance

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Over the last 90 days Eyepoint Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Checkpoint Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Checkpoint Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Checkpoint Therapeutics is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Eyepoint Pharmaceuticals and Checkpoint Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eyepoint Pharmaceuticals and Checkpoint Therapeutics

The main advantage of trading using opposite Eyepoint Pharmaceuticals and Checkpoint Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eyepoint Pharmaceuticals position performs unexpectedly, Checkpoint 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 Checkpoint Therapeutics will offset losses from the drop in Checkpoint Therapeutics' long position.
The idea behind Eyepoint Pharmaceuticals and Checkpoint 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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