Correlation Between Quoin Pharmaceuticals and Tempest Therapeutics

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

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

Diversification Opportunities for Quoin Pharmaceuticals and Tempest Therapeutics

0.19

Correlation Coefficient

Quoin Pharmaceuticals  Tempest Therapeutics

Average diversification

The 3 months correlation between Quoin and Tempest is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Quoin Pharmaceuticals Ltd and Tempest Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempest Therapeutics and Quoin 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 Quoin Pharmaceuticals Ltd are associated (or correlated) with Tempest Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempest Therapeutics has no effect on the direction of Quoin Pharmaceuticals i.e., Quoin Pharmaceuticals and Tempest Therapeutics go up and down completely randomly.

Pair Corralation between Quoin Pharmaceuticals and Tempest Therapeutics

Given the investment horizon of 90 days Quoin Pharmaceuticals Ltd is expected to under-perform the Tempest Therapeutics. In addition to that, Quoin Pharmaceuticals is 2.03 times more volatile than Tempest Therapeutics. It trades about -0.22 of its total potential returns per unit of risk. Tempest Therapeutics is currently generating about -0.02 per unit of volatility. If you would invest  84.00  in Tempest Therapeutics on December 28, 2024 and sell it today you would lose (6.79) from holding Tempest Therapeutics or give up 8.08% of portfolio value over 90 days.

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

Quoin Pharmaceuticals Ltd  vs.  Tempest Therapeutics

Quoin Pharmaceuticals

Risk-Adjusted Performance

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Tempest Therapeutics

Risk-Adjusted Performance

Weak

Over the last 90 days Tempest Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tempest Therapeutics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Quoin Pharmaceuticals and Tempest Therapeutics

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

The idea behind Quoin Pharmaceuticals Ltd and Tempest 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.