Correlation Between Simulations Plus and Certara

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

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

Diversification Opportunities for Simulations Plus and Certara

0.95

Correlation Coefficient

Simulations Plus  Certara

Almost no diversification

The 3 months correlation between Simulations and Certara is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Simulations Plus and Certara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Certara and Simulations Plus 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 Simulations Plus are associated (or correlated) with Certara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Certara has no effect on the direction of Simulations Plus i.e., Simulations Plus and Certara go up and down completely randomly.

Pair Corralation between Simulations Plus and Certara

Considering the 90-day investment horizon Simulations Plus is expected to under-perform the Certara. But the stock apears to be less risky and, when comparing its historical volatility, Simulations Plus is 1.03 times less risky than Certara. The stock trades about -0.07 of its potential returns per unit of risk. The Certara is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,054  in Certara on December 30, 2024 and sell it today you would lose (63.00) from holding Certara or give up 5.98% of portfolio value over 90 days.

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

Simulations Plus  vs.  Certara

Simulations Plus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simulations Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Certara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Certara 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 Simulations Plus and Certara

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

The idea behind Simulations Plus and Certara 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.