Correlation Between Precigen and Aldeyra

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

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

Diversification Opportunities for Precigen and Aldeyra

0.06

Correlation Coefficient

Precigen  Aldeyra

Significant diversification

The 3 months correlation between Precigen and Aldeyra is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Precigen and Aldeyra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldeyra and Precigen 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 Precigen are associated (or correlated) with Aldeyra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldeyra has no effect on the direction of Precigen i.e., Precigen and Aldeyra go up and down completely randomly.

Pair Corralation between Precigen and Aldeyra

Given the investment horizon of 90 days Precigen is expected to generate 1.58 times more return on investment than Aldeyra. However, Precigen is 1.58 times more volatile than Aldeyra. It trades about 0.11 of its potential returns per unit of risk. Aldeyra is currently generating about 0.0 per unit of risk. If you would invest  85.00  in Precigen on October 25, 2024 and sell it today you would earn a total of  28.00  from holding Precigen or generate 32.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Precigen  vs.  Aldeyra

Precigen

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precigen are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Precigen displayed solid returns over the last few months and may actually be approaching a breakup point.

Aldeyra

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Precigen and Aldeyra

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

The idea behind Precigen and Aldeyra 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 Stocks Directory module to find actively traded stocks across global markets.