Correlation Between Living Cell and Protokinetix

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

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

Diversification Opportunities for Living Cell and Protokinetix

0.15

Correlation Coefficient

Living Cell  Protokinetix

Average diversification

The 3 months correlation between Living and Protokinetix is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Living Cell Technologies and Protokinetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protokinetix and Living Cell 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 Living Cell Technologies are associated (or correlated) with Protokinetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protokinetix has no effect on the direction of Living Cell i.e., Living Cell and Protokinetix go up and down completely randomly.

Pair Corralation between Living Cell and Protokinetix

Assuming the 90 days horizon Living Cell Technologies is expected to under-perform the Protokinetix. But the pink sheet apears to be less risky and, when comparing its historical volatility, Living Cell Technologies is 1.33 times less risky than Protokinetix. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Protokinetix is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.07  in Protokinetix on September 30, 2024 and sell it today you would lose (0.07) from holding Protokinetix or give up 6.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Living Cell Technologies  vs.  Protokinetix

Living Cell Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Living Cell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Protokinetix

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Protokinetix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Protokinetix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Living Cell and Protokinetix

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

The idea behind Living Cell Technologies and Protokinetix 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.