Correlation Between PolyPid and Galera Therapeutics

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

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

Diversification Opportunities for PolyPid and Galera Therapeutics

0.21

Correlation Coefficient

PolyPid  Galera Therapeutics

Modest diversification

The 3 months correlation between PolyPid and Galera is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PolyPid and Galera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galera Therapeutics and PolyPid 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 PolyPid are associated (or correlated) with Galera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galera Therapeutics has no effect on the direction of PolyPid i.e., PolyPid and Galera Therapeutics go up and down completely randomly.

Pair Corralation between PolyPid and Galera Therapeutics

If you would invest  345.00  in PolyPid on September 22, 2024 and sell it today you would lose (23.00) from holding PolyPid or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

PolyPid  vs.  Galera Therapeutics

PolyPid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PolyPid has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PolyPid is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Galera Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PolyPid and Galera Therapeutics

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

The idea behind PolyPid and Galera Therapeutics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.