Correlation Between Oncotelic Therapeutics and Processa Pharmaceuticals

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

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

Diversification Opportunities for Oncotelic Therapeutics and Processa Pharmaceuticals

0.71

Correlation Coefficient

Oncotelic Therapeutics  Processa Pharmaceuticals

Poor diversification

The 3 months correlation between Oncotelic and Processa is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Oncotelic Therapeutics and Processa Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Processa Pharmaceuticals and Oncotelic Therapeutics 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 Oncotelic Therapeutics are associated (or correlated) with Processa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Processa Pharmaceuticals has no effect on the direction of Oncotelic Therapeutics i.e., Oncotelic Therapeutics and Processa Pharmaceuticals go up and down completely randomly.

Pair Corralation between Oncotelic Therapeutics and Processa Pharmaceuticals

If you would invest  2.20  in Oncotelic Therapeutics on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Oncotelic Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Oncotelic Therapeutics  vs.  Processa Pharmaceuticals

Oncotelic Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oncotelic Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Oncotelic Therapeutics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Processa Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Processa Pharmaceuticals 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Oncotelic Therapeutics and Processa Pharmaceuticals

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

The idea behind Oncotelic Therapeutics and Processa Pharmaceuticals 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.