Correlation Between Vericel Corp and Yield10 Bioscience

Can any of the company-specific risk be diversified away by investing in both Vericel Corp and Yield10 Bioscience 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 Vericel Corp and Yield10 Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vericel Corp Ord and Yield10 Bioscience, you can compare the effects of market volatilities on Vericel Corp and Yield10 Bioscience 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 Vericel Corp with a short position of Yield10 Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Yield10 Bioscience.

Diversification Opportunities for Vericel Corp and Yield10 Bioscience

-0.82

Correlation Coefficient

Vericel Corp  Yield10 Bioscience

Pay attention - limited upside

The 3 months correlation between Vericel and Yield10 is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Yield10 Bioscience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yield10 Bioscience and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Yield10 Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yield10 Bioscience has no effect on the direction of Vericel Corp i.e., Vericel Corp and Yield10 Bioscience go up and down completely randomly.

Pair Corralation between Vericel Corp and Yield10 Bioscience

Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 0.22 times more return on investment than Yield10 Bioscience. However, Vericel Corp Ord is 4.49 times less risky than Yield10 Bioscience. It trades about 0.08 of its potential returns per unit of risk. Yield10 Bioscience is currently generating about -0.02 per unit of risk. If you would invest  2,383  in Vericel Corp Ord on October 9, 2024 and sell it today you would earn a total of  3,378  from holding Vericel Corp Ord or generate 141.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Vericel Corp Ord  vs.  Yield10 Bioscience

Vericel Corp Ord

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Vericel Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Yield10 Bioscience

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yield10 Bioscience are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Yield10 Bioscience displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vericel Corp and Yield10 Bioscience

The main advantage of trading using opposite Vericel Corp and Yield10 Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp position performs unexpectedly, Yield10 Bioscience 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 Yield10 Bioscience will offset losses from the drop in Yield10 Bioscience's long position.

The idea behind Vericel Corp Ord and Yield10 Bioscience 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.