Correlation Between Ocugen and Tonix Pharmaceuticals

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

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

Diversification Opportunities for Ocugen and Tonix Pharmaceuticals

0.13

Correlation Coefficient

Ocugen  Tonix Pharmaceuticals

Average diversification

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

Pair Corralation between Ocugen and Tonix Pharmaceuticals

Given the investment horizon of 90 days Ocugen Inc is expected to under-perform the Tonix Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Ocugen Inc is 5.5 times less risky than Tonix Pharmaceuticals. The stock trades about -0.17 of its potential returns per unit of risk. The Tonix Pharmaceuticals Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,897  in Tonix Pharmaceuticals Holding on November 29, 2024 and sell it today you would lose (1,088) from holding Tonix Pharmaceuticals Holding or give up 57.33% of portfolio value over 90 days.

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

Ocugen Inc  vs.  Tonix Pharmaceuticals Holding

Ocugen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocugen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Tonix Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tonix Pharmaceuticals Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Tonix Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ocugen and Tonix Pharmaceuticals

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

The idea behind Ocugen Inc and Tonix Pharmaceuticals Holding 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.