Correlation Between Beyond Air and Context Therapeutics

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

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

Diversification Opportunities for Beyond Air and Context Therapeutics

0.61

Correlation Coefficient

Beyond Air  Context Therapeutics

Poor diversification

The 3 months correlation between Beyond and Context is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Context Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Context Therapeutics and Beyond Air 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 Beyond Air are associated (or correlated) with Context Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Context Therapeutics has no effect on the direction of Beyond Air i.e., Beyond Air and Context Therapeutics go up and down completely randomly.

Pair Corralation between Beyond Air and Context Therapeutics

Given the investment horizon of 90 days Beyond Air is expected to under-perform the Context Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Beyond Air is 1.1 times less risky than Context Therapeutics. The stock trades about -0.1 of its potential returns per unit of risk. The Context Therapeutics is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  110.00  in Context Therapeutics on December 27, 2024 and sell it today you would lose (36.35) from holding Context Therapeutics or give up 33.05% of portfolio value over 90 days.

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

Beyond Air  vs.  Context Therapeutics

Beyond Air

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beyond Air has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Context Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Context Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Beyond Air and Context Therapeutics

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

The idea behind Beyond Air and Context 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.