Correlation Between Humacyte and Celularity

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

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

Diversification Opportunities for Humacyte and Celularity

-0.26

Correlation Coefficient

Humacyte  Celularity

Very good diversification

The 3 months correlation between Humacyte and Celularity is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Humacyte and Celularity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celularity and Humacyte 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 Humacyte are associated (or correlated) with Celularity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celularity has no effect on the direction of Humacyte i.e., Humacyte and Celularity go up and down completely randomly.

Pair Corralation between Humacyte and Celularity

Assuming the 90 days horizon Humacyte is expected to generate 1.35 times less return on investment than Celularity. But when comparing it to its historical volatility, Humacyte is 2.3 times less risky than Celularity. It trades about 0.05 of its potential returns per unit of risk. Celularity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  286.00  in Celularity on September 2, 2024 and sell it today you would lose (82.00) from holding Celularity or give up 28.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Humacyte  vs.  Celularity

Humacyte

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Humacyte are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Humacyte showed solid returns over the last few months and may actually be approaching a breakup point.

Celularity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Celularity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Celularity unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humacyte and Celularity

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

The idea behind Humacyte and Celularity 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.