Correlation Between Zivo Bioscience and Bellicum Pharmaceuticals

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

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

Diversification Opportunities for Zivo Bioscience and Bellicum Pharmaceuticals

-0.25

Correlation Coefficient

Zivo Bioscience  Bellicum Pharmaceuticals

Very good diversification

The 3 months correlation between Zivo and Bellicum is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zivo Bioscience and Bellicum Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellicum Pharmaceuticals and Zivo Bioscience 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 Zivo Bioscience are associated (or correlated) with Bellicum Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellicum Pharmaceuticals has no effect on the direction of Zivo Bioscience i.e., Zivo Bioscience and Bellicum Pharmaceuticals go up and down completely randomly.

Pair Corralation between Zivo Bioscience and Bellicum Pharmaceuticals

Given the investment horizon of 90 days Zivo Bioscience is expected to under-perform the Bellicum Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Zivo Bioscience is 4.39 times less risky than Bellicum Pharmaceuticals. The stock trades about -0.05 of its potential returns per unit of risk. The Bellicum Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Bellicum Pharmaceuticals on October 11, 2024 and sell it today you would lose (91.00) from holding Bellicum Pharmaceuticals or give up 71.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.34%
Values	Daily Returns

Zivo Bioscience  vs.  Bellicum Pharmaceuticals

Zivo Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zivo Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zivo Bioscience is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Bellicum Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellicum Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bellicum Pharmaceuticals is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Zivo Bioscience and Bellicum Pharmaceuticals

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

The idea behind Zivo Bioscience and Bellicum Pharmaceuticals 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.

Check out your portfolio center.

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.