Correlation Between Protokinetix and Alpha Cognition

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

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

Diversification Opportunities for Protokinetix and Alpha Cognition

-0.4

Correlation Coefficient

Protokinetix  Alpha Cognition

Very good diversification

The 3 months correlation between Protokinetix and Alpha is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Protokinetix and Alpha Cognition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Cognition and Protokinetix 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 Protokinetix are associated (or correlated) with Alpha Cognition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Cognition has no effect on the direction of Protokinetix i.e., Protokinetix and Alpha Cognition go up and down completely randomly.

Pair Corralation between Protokinetix and Alpha Cognition

Given the investment horizon of 90 days Protokinetix is expected to generate 3.27 times more return on investment than Alpha Cognition. However, Protokinetix is 3.27 times more volatile than Alpha Cognition. It trades about 0.1 of its potential returns per unit of risk. Alpha Cognition is currently generating about 0.23 per unit of risk. If you would invest  0.99  in Protokinetix on December 30, 2024 and sell it today you would earn a total of  0.41  from holding Protokinetix or generate 41.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	30.65%
Values	Daily Returns

Protokinetix  vs.  Alpha Cognition

Protokinetix

Risk-Adjusted Performance

OK

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

Alpha Cognition

Risk-Adjusted Performance

Solid

Over the last 90 days Alpha Cognition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical and fundamental indicators, Alpha Cognition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Protokinetix and Alpha Cognition

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

The idea behind Protokinetix and Alpha Cognition 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.