Correlation Between Cellectis and Biophytis
Can any of the company-specific risk be diversified away by investing in both Cellectis and Biophytis 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 Cellectis and Biophytis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cellectis and Biophytis SA, you can compare the effects of market volatilities on Cellectis and Biophytis 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 Cellectis with a short position of Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellectis and Biophytis.
Diversification Opportunities for Cellectis and Biophytis
Very poor diversification
The 3 months correlation between Cellectis and Biophytis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cellectis and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis SA and Cellectis 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 Cellectis are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis SA has no effect on the direction of Cellectis i.e., Cellectis and Biophytis go up and down completely randomly.
Pair Corralation between Cellectis and Biophytis
Assuming the 90 days trading horizon Cellectis is expected to generate 0.55 times more return on investment than Biophytis. However, Cellectis is 1.8 times less risky than Biophytis. It trades about 0.17 of its potential returns per unit of risk. Biophytis SA is currently generating about -0.01 per unit of risk. If you would invest 171.00 in Cellectis on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Cellectis or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cellectis vs. Biophytis SA
Performance |
| Timeline |
| Cellectis |
| Biophytis SA |
Cellectis and Biophytis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellectis and Biophytis
The main advantage of trading using opposite Cellectis and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellectis position performs unexpectedly, Biophytis 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 Biophytis will offset losses from the drop in Biophytis' long position.The idea behind Cellectis and Biophytis SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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