Correlation Between Statera Biopharma and Alector

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

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

Diversification Opportunities for Statera Biopharma and Alector

0.42

Correlation Coefficient

Statera Biopharma  Alector

Very weak diversification

The 3 months correlation between Statera and Alector is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Statera Biopharma and Alector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alector and Statera 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 Statera Biopharma are associated (or correlated) with Alector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alector has no effect on the direction of Statera Biopharma i.e., Statera Biopharma and Alector go up and down completely randomly.

Pair Corralation between Statera Biopharma and Alector

If you would invest  3.61  in Statera Biopharma on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Statera Biopharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Statera Biopharma  vs.  Alector

Statera Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alector

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Statera Biopharma and Alector

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

The idea behind Statera Biopharma and Alector 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.