Correlation Between Gracell Biotechnologies and Adagene

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

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

Diversification Opportunities for Gracell Biotechnologies and Adagene

0.0

Correlation Coefficient

Gracell Biotechnologies  Adagene

Pay attention - limited upside

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

Pair Corralation between Gracell Biotechnologies and Adagene

If you would invest (100.00) in Gracell Biotechnologies on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Gracell Biotechnologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gracell Biotechnologies  vs.  Adagene

Gracell Biotechnologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gracell Biotechnologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Gracell Biotechnologies is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Adagene

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adagene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Gracell Biotechnologies and Adagene

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

The idea behind Gracell Biotechnologies and Adagene 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.