Correlation Between ImmuCell and Frequency Therapeutics

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

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

Diversification Opportunities for ImmuCell and Frequency Therapeutics

0.13

Correlation Coefficient

ImmuCell  Frequency Therapeutics

Average diversification

The 3 months correlation between ImmuCell and Frequency is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ImmuCell and Frequency Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Therapeutics and ImmuCell 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 ImmuCell are associated (or correlated) with Frequency Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Therapeutics has no effect on the direction of ImmuCell i.e., ImmuCell and Frequency Therapeutics go up and down completely randomly.

Pair Corralation between ImmuCell and Frequency Therapeutics

If you would invest  377.00  in ImmuCell on August 31, 2024 and sell it today you would earn a total of  35.00  from holding ImmuCell or generate 9.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

ImmuCell  vs.  Frequency Therapeutics

ImmuCell

Risk-Adjusted Performance

5 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, ImmuCell may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Frequency Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frequency Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Frequency Therapeutics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ImmuCell and Frequency Therapeutics

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

The idea behind ImmuCell and Frequency Therapeutics 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.