Correlation Between Fortress Biotech and Multicell Techs

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

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

Diversification Opportunities for Fortress Biotech and Multicell Techs

0.0

Correlation Coefficient

Fortress Biotech  Multicell Techs

Pay attention - limited upside

The 3 months correlation between Fortress and Multicell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and Multicell Techs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multicell Techs and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with Multicell Techs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multicell Techs has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Multicell Techs go up and down completely randomly.

Pair Corralation between Fortress Biotech and Multicell Techs

Assuming the 90 days horizon Fortress Biotech Pref is expected to under-perform the Multicell Techs. But the preferred stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech Pref is 9.92 times less risky than Multicell Techs. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Multicell Techs is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Multicell Techs on September 5, 2024 and sell it today you would lose (0.01) from holding Multicell Techs or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Fortress Biotech Pref  vs.  Multicell Techs

Fortress Biotech Pref

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Biotech Pref are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Fortress Biotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Multicell Techs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multicell Techs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Multicell Techs is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fortress Biotech and Multicell Techs

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

The idea behind Fortress Biotech Pref and Multicell Techs 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.