Correlation Between Algernon Pharmaceuticals and AgeX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Algernon Pharmaceuticals and AgeX 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 Algernon Pharmaceuticals and AgeX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algernon Pharmaceuticals and AgeX Therapeutics, you can compare the effects of market volatilities on Algernon Pharmaceuticals and AgeX 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 Algernon Pharmaceuticals with a short position of AgeX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algernon Pharmaceuticals and AgeX Therapeutics.
Diversification Opportunities for Algernon Pharmaceuticals and AgeX Therapeutics
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algernon and AgeX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Algernon Pharmaceuticals and AgeX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgeX Therapeutics and Algernon Pharmaceuticals 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 Algernon Pharmaceuticals are associated (or correlated) with AgeX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgeX Therapeutics has no effect on the direction of Algernon Pharmaceuticals i.e., Algernon Pharmaceuticals and AgeX Therapeutics go up and down completely randomly.
Pair Corralation between Algernon Pharmaceuticals and AgeX Therapeutics
Assuming the 90 days horizon Algernon Pharmaceuticals is expected to generate 29.34 times less return on investment than AgeX Therapeutics. In addition to that, Algernon Pharmaceuticals is 1.77 times more volatile than AgeX Therapeutics. It trades about 0.0 of its total potential returns per unit of risk. AgeX Therapeutics is currently generating about 0.06 per unit of volatility. If you would invest 56.00 in AgeX Therapeutics on August 25, 2024 and sell it today you would earn a total of 18.00 from holding AgeX Therapeutics or generate 32.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.99% |
| Values | Daily Returns |
Algernon Pharmaceuticals vs. AgeX Therapeutics
Performance |
| Timeline |
| Algernon Pharmaceuticals |
| AgeX Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Algernon Pharmaceuticals and AgeX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algernon Pharmaceuticals and AgeX Therapeutics
The main advantage of trading using opposite Algernon Pharmaceuticals and AgeX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algernon Pharmaceuticals position performs unexpectedly, AgeX 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 AgeX Therapeutics will offset losses from the drop in AgeX Therapeutics' long position.The idea behind Algernon Pharmaceuticals and AgeX 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.| AgeX Therapeutics vs. MAIA Biotechnology | AgeX Therapeutics vs. Larimar Therapeutics | AgeX Therapeutics vs. Lyra Therapeutics | AgeX Therapeutics vs. Lineage Cell 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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