Correlation Between PhaseBio Pharmaceuticals and ChitogenX

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

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

Diversification Opportunities for PhaseBio Pharmaceuticals and ChitogenX

0.0

Correlation Coefficient

PhaseBio Pharmaceuticals  ChitogenX

Pay attention - limited upside

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

Pair Corralation between PhaseBio Pharmaceuticals and ChitogenX

If you would invest (100.00) in PhaseBio Pharmaceuticals on December 3, 2024 and sell it today you would earn a total of  100.00  from holding PhaseBio Pharmaceuticals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PhaseBio Pharmaceuticals  vs.  ChitogenX

PhaseBio Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days PhaseBio Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, PhaseBio Pharmaceuticals is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

ChitogenX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ChitogenX are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ChitogenX reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PhaseBio Pharmaceuticals and ChitogenX

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

The idea behind PhaseBio Pharmaceuticals and ChitogenX 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.