Correlation Between Recursion Pharmaceuticals and 126117AU4

Can any of the company-specific risk be diversified away by investing in both Recursion Pharmaceuticals and 126117AU4 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 Recursion Pharmaceuticals and 126117AU4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Recursion Pharmaceuticals and CNA FINL P, you can compare the effects of market volatilities on Recursion Pharmaceuticals and 126117AU4 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 Recursion Pharmaceuticals with a short position of 126117AU4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recursion Pharmaceuticals and 126117AU4.

Diversification Opportunities for Recursion Pharmaceuticals and 126117AU4

0.16

Correlation Coefficient

Recursion Pharmaceuticals  126117AU4

Average diversification

The 3 months correlation between Recursion and 126117AU4 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Recursion Pharmaceuticals and CNA FINL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNA FINL P and Recursion 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 Recursion Pharmaceuticals are associated (or correlated) with 126117AU4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNA FINL P has no effect on the direction of Recursion Pharmaceuticals i.e., Recursion Pharmaceuticals and 126117AU4 go up and down completely randomly.

Pair Corralation between Recursion Pharmaceuticals and 126117AU4

Given the investment horizon of 90 days Recursion Pharmaceuticals is expected to under-perform the 126117AU4. In addition to that, Recursion Pharmaceuticals is 9.91 times more volatile than CNA FINL P. It trades about -0.02 of its total potential returns per unit of risk. CNA FINL P is currently generating about -0.14 per unit of volatility. If you would invest  9,680  in CNA FINL P on December 3, 2024 and sell it today you would lose (189.00) from holding CNA FINL P or give up 1.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Recursion Pharmaceuticals  vs.  CNA FINL P

Recursion Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Recursion Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Recursion Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CNA FINL P

Risk-Adjusted Performance

Very Weak

Over the last 90 days CNA FINL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 126117AU4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Recursion Pharmaceuticals and 126117AU4

The main advantage of trading using opposite Recursion Pharmaceuticals and 126117AU4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recursion Pharmaceuticals position performs unexpectedly, 126117AU4 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 126117AU4 will offset losses from the drop in 126117AU4's long position.

The idea behind Recursion Pharmaceuticals and CNA FINL P 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.