Correlation Between Science 37 and Cogstate

Can any of the company-specific risk be diversified away by investing in both Science 37 and Cogstate 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 Science 37 and Cogstate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Science 37 Holdings and Cogstate Limited, you can compare the effects of market volatilities on Science 37 and Cogstate 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 Science 37 with a short position of Cogstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science 37 and Cogstate.

Diversification Opportunities for Science 37 and Cogstate

-0.62

Correlation Coefficient

Science 37  Cogstate

Excellent diversification

The 3 months correlation between Science and Cogstate is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Science 37 Holdings and Cogstate Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogstate Limited and Science 37 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 Science 37 Holdings are associated (or correlated) with Cogstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogstate Limited has no effect on the direction of Science 37 i.e., Science 37 and Cogstate go up and down completely randomly.

Pair Corralation between Science 37 and Cogstate

If you would invest  28.00  in Science 37 Holdings on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Science 37 Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Science 37 Holdings  vs.  Cogstate Limited

Science 37 Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Science 37 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Science 37 is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Cogstate Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Science 37 and Cogstate

The main advantage of trading using opposite Science 37 and Cogstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science 37 position performs unexpectedly, Cogstate 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 Cogstate will offset losses from the drop in Cogstate's long position.

The idea behind Science 37 Holdings and Cogstate Limited 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.