Correlation Between Histogen and Salarius Pharmaceuticals

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

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

Diversification Opportunities for Histogen and Salarius Pharmaceuticals

0.39

Correlation Coefficient

Histogen  Salarius Pharmaceuticals

Weak diversification

The 3 months correlation between Histogen and Salarius is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Histogen and Salarius Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salarius Pharmaceuticals and Histogen 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 Histogen are associated (or correlated) with Salarius Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salarius Pharmaceuticals has no effect on the direction of Histogen i.e., Histogen and Salarius Pharmaceuticals go up and down completely randomly.

Pair Corralation between Histogen and Salarius Pharmaceuticals

Given the investment horizon of 90 days Histogen is expected to generate 1.46 times more return on investment than Salarius Pharmaceuticals. However, Histogen is 1.46 times more volatile than Salarius Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Salarius Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest  110.00  in Histogen on September 1, 2024 and sell it today you would lose (108.00) from holding Histogen or give up 98.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Histogen  vs.  Salarius Pharmaceuticals

Histogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Histogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Salarius Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salarius Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Salarius Pharmaceuticals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Histogen and Salarius Pharmaceuticals

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

The idea behind Histogen and Salarius Pharmaceuticals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.