Correlation Between Scholar Rock and Celcuity LLC

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

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

Diversification Opportunities for Scholar Rock and Celcuity LLC

0.38

Correlation Coefficient

Scholar Rock  Celcuity LLC

Weak diversification

The 3 months correlation between Scholar and Celcuity is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Scholar Rock Holding and Celcuity LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celcuity LLC and Scholar Rock 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 Scholar Rock Holding are associated (or correlated) with Celcuity LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celcuity LLC has no effect on the direction of Scholar Rock i.e., Scholar Rock and Celcuity LLC go up and down completely randomly.

Pair Corralation between Scholar Rock and Celcuity LLC

Given the investment horizon of 90 days Scholar Rock Holding is expected to under-perform the Celcuity LLC. But the stock apears to be less risky and, when comparing its historical volatility, Scholar Rock Holding is 1.4 times less risky than Celcuity LLC. The stock trades about -0.13 of its potential returns per unit of risk. The Celcuity LLC is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,313  in Celcuity LLC on December 29, 2024 and sell it today you would lose (259.00) from holding Celcuity LLC or give up 19.73% of portfolio value over 90 days.

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

Scholar Rock Holding  vs.  Celcuity LLC

Scholar Rock Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scholar Rock Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Celcuity LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celcuity LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Scholar Rock and Celcuity LLC

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

The idea behind Scholar Rock Holding and Celcuity LLC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.