Correlation Between ABL Bio and Cytogen
Can any of the company-specific risk be diversified away by investing in both ABL Bio and Cytogen 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 ABL Bio and Cytogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABL Bio and Cytogen, you can compare the effects of market volatilities on ABL Bio and Cytogen 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 ABL Bio with a short position of Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABL Bio and Cytogen.
Diversification Opportunities for ABL Bio and Cytogen
Good diversification
The 3 months correlation between ABL and Cytogen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ABL Bio and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen and ABL Bio 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 ABL Bio are associated (or correlated) with Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of ABL Bio i.e., ABL Bio and Cytogen go up and down completely randomly.
Pair Corralation between ABL Bio and Cytogen
Assuming the 90 days trading horizon ABL Bio is expected to generate 1.62 times more return on investment than Cytogen. However, ABL Bio is 1.62 times more volatile than Cytogen. It trades about 0.39 of its potential returns per unit of risk. Cytogen is currently generating about -0.06 per unit of risk. If you would invest 3,580,000 in ABL Bio on January 21, 2025 and sell it today you would earn a total of 2,910,000 from holding ABL Bio or generate 81.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABL Bio vs. Cytogen
Performance |
| Timeline |
| ABL Bio |
| Cytogen |
ABL Bio and Cytogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABL Bio and Cytogen
The main advantage of trading using opposite ABL Bio and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABL Bio position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.The idea behind ABL Bio and Cytogen 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.| Cytogen vs. KNOTUS CoLtd | Cytogen vs. Bridge Biotherapeutics | Cytogen vs. AptaBio Therapeutics | Cytogen vs. Genolution |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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