Correlation Between Pro Dex and ImmuCell

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

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

Diversification Opportunities for Pro Dex and ImmuCell

0.58

Correlation Coefficient

Pro Dex  ImmuCell

Very weak diversification

The 3 months correlation between Pro and ImmuCell is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and Pro Dex 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 Pro Dex 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 Pro Dex i.e., Pro Dex and ImmuCell go up and down completely randomly.

Pair Corralation between Pro Dex and ImmuCell

Given the investment horizon of 90 days Pro Dex is expected to generate 84.5 times less return on investment than ImmuCell. In addition to that, Pro Dex is 2.0 times more volatile than ImmuCell. It trades about 0.0 of its total potential returns per unit of risk. ImmuCell is currently generating about 0.26 per unit of volatility. If you would invest  471.00  in ImmuCell on October 22, 2024 and sell it today you would earn a total of  79.00  from holding ImmuCell or generate 16.77% return on investment over 90 days.

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

Pro Dex  vs.  ImmuCell

Pro Dex

Risk-Adjusted Performance

11 of 100

Good

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

ImmuCell

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 14 (%) 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 Pro Dex and ImmuCell

The main advantage of trading using opposite Pro Dex and ImmuCell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Dex 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 Pro Dex 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.