Correlation Between Pulmatrix and Quoin Pharmaceuticals

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

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

Diversification Opportunities for Pulmatrix and Quoin Pharmaceuticals

-0.14

Correlation Coefficient

Pulmatrix  Quoin Pharmaceuticals

Good diversification

The 3 months correlation between Pulmatrix and Quoin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pulmatrix and Quoin Pharmaceuticals Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quoin Pharmaceuticals and Pulmatrix 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 Pulmatrix are associated (or correlated) with Quoin Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quoin Pharmaceuticals has no effect on the direction of Pulmatrix i.e., Pulmatrix and Quoin Pharmaceuticals go up and down completely randomly.

Pair Corralation between Pulmatrix and Quoin Pharmaceuticals

Given the investment horizon of 90 days Pulmatrix is expected to generate 1.14 times more return on investment than Quoin Pharmaceuticals. However, Pulmatrix is 1.14 times more volatile than Quoin Pharmaceuticals Ltd. It trades about 0.19 of its potential returns per unit of risk. Quoin Pharmaceuticals Ltd is currently generating about 0.01 per unit of risk. If you would invest  205.00  in Pulmatrix on September 4, 2024 and sell it today you would earn a total of  429.00  from holding Pulmatrix or generate 209.27% return on investment over 90 days.

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

Pulmatrix  vs.  Quoin Pharmaceuticals Ltd

Pulmatrix

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmatrix are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Pulmatrix displayed solid returns over the last few months and may actually be approaching a breakup point.

Quoin Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quoin Pharmaceuticals Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly conflicting basic indicators, Quoin Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pulmatrix and Quoin Pharmaceuticals

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

The idea behind Pulmatrix and Quoin Pharmaceuticals Ltd 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.