Correlation Between Fluicell and Elicera Therapeutics

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

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

Diversification Opportunities for Fluicell and Elicera Therapeutics

-0.16

Correlation Coefficient

Fluicell  Elicera Therapeutics

Good diversification

The 3 months correlation between Fluicell and Elicera is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fluicell AB and Elicera Therapeutics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicera Therapeutics and Fluicell 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 Fluicell AB are associated (or correlated) with Elicera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicera Therapeutics has no effect on the direction of Fluicell i.e., Fluicell and Elicera Therapeutics go up and down completely randomly.

Pair Corralation between Fluicell and Elicera Therapeutics

Assuming the 90 days trading horizon Fluicell is expected to generate 30.55 times less return on investment than Elicera Therapeutics. In addition to that, Fluicell is 1.97 times more volatile than Elicera Therapeutics AB. It trades about 0.0 of its total potential returns per unit of risk. Elicera Therapeutics AB is currently generating about 0.15 per unit of volatility. If you would invest  155.00  in Elicera Therapeutics AB on October 23, 2024 and sell it today you would earn a total of  78.00  from holding Elicera Therapeutics AB or generate 50.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Fluicell AB  vs.  Elicera Therapeutics AB

Fluicell AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Elicera Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elicera Therapeutics AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Elicera Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fluicell and Elicera Therapeutics

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

The idea behind Fluicell AB and Elicera Therapeutics AB 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.