Correlation Between Arcus Biosciences and Aditxt

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

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

Diversification Opportunities for Arcus Biosciences and Aditxt

0.65

Correlation Coefficient

Arcus Biosciences  Aditxt

Poor diversification

The 3 months correlation between Arcus and Aditxt is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arcus Biosciences and Aditxt Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aditxt Inc and Arcus Biosciences 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 Arcus Biosciences are associated (or correlated) with Aditxt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aditxt Inc has no effect on the direction of Arcus Biosciences i.e., Arcus Biosciences and Aditxt go up and down completely randomly.

Pair Corralation between Arcus Biosciences and Aditxt

Given the investment horizon of 90 days Arcus Biosciences is expected to generate 0.39 times more return on investment than Aditxt. However, Arcus Biosciences is 2.55 times less risky than Aditxt. It trades about -0.34 of its potential returns per unit of risk. Aditxt Inc is currently generating about -0.46 per unit of risk. If you would invest  1,716  in Arcus Biosciences on October 13, 2024 and sell it today you would lose (296.00) from holding Arcus Biosciences or give up 17.25% of portfolio value over 90 days.

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

Arcus Biosciences  vs.  Aditxt Inc

Arcus Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcus Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Aditxt Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aditxt Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Arcus Biosciences and Aditxt

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

The idea behind Arcus Biosciences and Aditxt Inc 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.