Correlation Between PepGen and Decision Diagnostics

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

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

Diversification Opportunities for PepGen and Decision Diagnostics

0.0

Correlation Coefficient

PepGen  Decision Diagnostics

Pay attention - limited upside

The 3 months correlation between PepGen and Decision is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Decision Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decision Diagnostics and PepGen 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 PepGen are associated (or correlated) with Decision Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decision Diagnostics has no effect on the direction of PepGen i.e., PepGen and Decision Diagnostics go up and down completely randomly.

Pair Corralation between PepGen and Decision Diagnostics

If you would invest  0.01  in Decision Diagnostics on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Decision Diagnostics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

PepGen  vs.  Decision Diagnostics

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic 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.

Decision Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Decision Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Decision Diagnostics is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PepGen and Decision Diagnostics

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

The idea behind PepGen and Decision Diagnostics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.