Correlation Between Adagene and Cingulate
Can any of the company-specific risk be diversified away by investing in both Adagene and Cingulate 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 Adagene and Cingulate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and Cingulate, you can compare the effects of market volatilities on Adagene and Cingulate 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 Adagene with a short position of Cingulate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and Cingulate.
Diversification Opportunities for Adagene and Cingulate
Very good diversification
The 3 months correlation between Adagene and Cingulate is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate and Adagene 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 Adagene are associated (or correlated) with Cingulate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate has no effect on the direction of Adagene i.e., Adagene and Cingulate go up and down completely randomly.
Pair Corralation between Adagene and Cingulate
Given the investment horizon of 90 days Adagene is expected to generate 1.17 times less return on investment than Cingulate. But when comparing it to its historical volatility, Adagene is 3.01 times less risky than Cingulate. It trades about 0.03 of its potential returns per unit of risk. Cingulate is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 23,760 in Cingulate on October 21, 2024 and sell it today you would lose (23,284) from holding Cingulate or give up 98.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. Cingulate
Performance |
| Timeline |
| Adagene |
| Cingulate |
Adagene and Cingulate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and Cingulate
The main advantage of trading using opposite Adagene and Cingulate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, Cingulate 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 Cingulate will offset losses from the drop in Cingulate's long position.| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
| Cingulate vs. SAB Biotherapeutics | Cingulate vs. Senti Biosciences | Cingulate vs. Aerovate Therapeutics | Cingulate vs. Adagene |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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