Correlation Between Alpha Cognition and Adagene
Can any of the company-specific risk be diversified away by investing in both Alpha Cognition and Adagene 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 Cognition and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Cognition and Adagene, you can compare the effects of market volatilities on Alpha Cognition and Adagene 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 Cognition with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Cognition and Adagene.
Diversification Opportunities for Alpha Cognition and Adagene
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alpha and Adagene is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Cognition and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Alpha Cognition 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 Cognition are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Alpha Cognition i.e., Alpha Cognition and Adagene go up and down completely randomly.
Pair Corralation between Alpha Cognition and Adagene
Assuming the 90 days horizon Alpha Cognition is expected to generate 8.15 times more return on investment than Adagene. However, Alpha Cognition is 8.15 times more volatile than Adagene. It trades about 0.05 of its potential returns per unit of risk. Adagene is currently generating about 0.05 per unit of risk. If you would invest 1,024 in Alpha Cognition on August 31, 2024 and sell it today you would lose (357.00) from holding Alpha Cognition or give up 34.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Cognition vs. Adagene
Performance |
| Timeline |
| Alpha Cognition |
| Adagene |
Alpha Cognition and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Cognition and Adagene
The main advantage of trading using opposite Alpha Cognition and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Cognition position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Alpha Cognition vs. Rigel Pharmaceuticals | Alpha Cognition vs. Geron | Alpha Cognition vs. Verastem | Alpha Cognition vs. Immutep Ltd ADR |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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