Correlation Between Nascent Biotech and Cellectis

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

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

Diversification Opportunities for Nascent Biotech and Cellectis

0.35

Correlation Coefficient

Nascent Biotech  Cellectis

Weak diversification

The 3 months correlation between Nascent and Cellectis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nascent Biotech and Cellectis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellectis SA and Nascent Biotech 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 Nascent Biotech are associated (or correlated) with Cellectis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellectis SA has no effect on the direction of Nascent Biotech i.e., Nascent Biotech and Cellectis go up and down completely randomly.

Pair Corralation between Nascent Biotech and Cellectis

Given the investment horizon of 90 days Nascent Biotech is expected to generate 40.02 times more return on investment than Cellectis. However, Nascent Biotech is 40.02 times more volatile than Cellectis SA. It trades about 0.15 of its potential returns per unit of risk. Cellectis SA is currently generating about -0.13 per unit of risk. If you would invest  5.05  in Nascent Biotech on December 30, 2024 and sell it today you would lose (4.40) from holding Nascent Biotech or give up 87.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Nascent Biotech  vs.  Cellectis SA

Nascent Biotech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nascent Biotech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Nascent Biotech displayed solid returns over the last few months and may actually be approaching a breakup point.

Cellectis SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cellectis SA 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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nascent Biotech and Cellectis

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

The idea behind Nascent Biotech and Cellectis SA 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.