Correlation Between Alpha Teknova and Assertio Therapeutics

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

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

Diversification Opportunities for Alpha Teknova and Assertio Therapeutics

-0.7

Correlation Coefficient

Alpha Teknova  Assertio Therapeutics

Excellent diversification

The 3 months correlation between Alpha and Assertio is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Teknova and Assertio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assertio Therapeutics and Alpha Teknova 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 Alpha Teknova are associated (or correlated) with Assertio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assertio Therapeutics has no effect on the direction of Alpha Teknova i.e., Alpha Teknova and Assertio Therapeutics go up and down completely randomly.

Pair Corralation between Alpha Teknova and Assertio Therapeutics

Given the investment horizon of 90 days Alpha Teknova is expected to generate 1.23 times more return on investment than Assertio Therapeutics. However, Alpha Teknova is 1.23 times more volatile than Assertio Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Assertio Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  692.00  in Alpha Teknova on September 3, 2024 and sell it today you would earn a total of  55.00  from holding Alpha Teknova or generate 7.95% return on investment over 90 days.

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

Alpha Teknova  vs.  Assertio Therapeutics

Alpha Teknova

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Teknova are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Alpha Teknova displayed solid returns over the last few months and may actually be approaching a breakup point.

Assertio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assertio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Assertio Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alpha Teknova and Assertio Therapeutics

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

The idea behind Alpha Teknova and Assertio Therapeutics 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.