Correlation Between Natural Alternatives and ImmuCell

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

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

Diversification Opportunities for Natural Alternatives and ImmuCell

-0.57

Correlation Coefficient

Natural Alternatives  ImmuCell

Excellent diversification

The 3 months correlation between Natural and ImmuCell is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and Natural Alternatives 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 Natural Alternatives International 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 Natural Alternatives i.e., Natural Alternatives and ImmuCell go up and down completely randomly.

Pair Corralation between Natural Alternatives and ImmuCell

Given the investment horizon of 90 days Natural Alternatives is expected to generate 29.69 times less return on investment than ImmuCell. But when comparing it to its historical volatility, Natural Alternatives International is 2.89 times less risky than ImmuCell. It trades about 0.01 of its potential returns per unit of risk. ImmuCell is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  489.00  in ImmuCell on October 11, 2024 and sell it today you would earn a total of  28.00  from holding ImmuCell or generate 5.73% return on investment over 90 days.

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

Natural Alternatives Internati  vs.  ImmuCell

Natural Alternatives

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natural Alternatives International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

ImmuCell

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 13 (%) 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 Natural Alternatives and ImmuCell

The main advantage of trading using opposite Natural Alternatives and ImmuCell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives 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 Natural Alternatives International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.