Correlation Between Principal Exchange and ImmuCell

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

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

Diversification Opportunities for Principal Exchange and ImmuCell

-0.23

Correlation Coefficient

Principal Exchange  ImmuCell

Very good diversification

The 3 months correlation between Principal and ImmuCell is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Principal Exchange Traded Fund and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and Principal Exchange 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 Principal Exchange Traded Funds are associated (or correlated) with ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Principal Exchange i.e., Principal Exchange and ImmuCell go up and down completely randomly.

Pair Corralation between Principal Exchange and ImmuCell

Allowing for the 90-day total investment horizon Principal Exchange is expected to generate 106.77 times less return on investment than ImmuCell. But when comparing it to its historical volatility, Principal Exchange Traded Funds is 11.66 times less risky than ImmuCell. It trades about 0.01 of its potential returns per unit of risk. ImmuCell is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  413.00  in ImmuCell on December 1, 2024 and sell it today you would earn a total of  115.00  from holding ImmuCell or generate 27.85% return on investment over 90 days.

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

Principal Exchange Traded Fund  vs.  ImmuCell

Principal Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days Principal Exchange Traded Funds has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Principal Exchange is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ImmuCell

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, ImmuCell exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Principal Exchange and ImmuCell

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

The idea behind Principal Exchange Traded Funds and ImmuCell 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.