Correlation Between Regen BioPharma and Enlivex Therapeutics

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

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

Diversification Opportunities for Regen BioPharma and Enlivex Therapeutics

0.56

Correlation Coefficient

Regen BioPharma  Enlivex Therapeutics

Very weak diversification

The 3 months correlation between Regen and Enlivex is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Regen BioPharma and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex Therapeutics and Regen BioPharma 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 Regen BioPharma are associated (or correlated) with Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of Regen BioPharma i.e., Regen BioPharma and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between Regen BioPharma and Enlivex Therapeutics

Given the investment horizon of 90 days Regen BioPharma is expected to generate 7.66 times more return on investment than Enlivex Therapeutics. However, Regen BioPharma is 7.66 times more volatile than Enlivex Therapeutics. It trades about 0.16 of its potential returns per unit of risk. Enlivex Therapeutics is currently generating about -0.05 per unit of risk. If you would invest  8.99  in Regen BioPharma on September 12, 2024 and sell it today you would lose (1.49) from holding Regen BioPharma or give up 16.57% of portfolio value over 90 days.

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

Regen BioPharma  vs.  Enlivex Therapeutics

Regen BioPharma

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Regen BioPharma and Enlivex Therapeutics

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

The idea behind Regen BioPharma and Enlivex 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.