Correlation Between Aldeyra and ImmuCell
Can any of the company-specific risk be diversified away by investing in both Aldeyra and ImmuCell 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 Aldeyra and ImmuCell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldeyra and ImmuCell, you can compare the effects of market volatilities on Aldeyra and ImmuCell 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 Aldeyra with a short position of ImmuCell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldeyra and ImmuCell.
Diversification Opportunities for Aldeyra and ImmuCell
Modest diversification
The 3 months correlation between Aldeyra and ImmuCell is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aldeyra and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and Aldeyra 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 Aldeyra are associated (or correlated) with ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Aldeyra i.e., Aldeyra and ImmuCell go up and down completely randomly.
Pair Corralation between Aldeyra and ImmuCell
Given the investment horizon of 90 days Aldeyra is expected to generate 2.2 times more return on investment than ImmuCell. However, Aldeyra is 2.2 times more volatile than ImmuCell. It trades about 0.03 of its potential returns per unit of risk. ImmuCell is currently generating about -0.03 per unit of risk. If you would invest 614.00 in Aldeyra on August 30, 2024 and sell it today you would lose (120.00) from holding Aldeyra or give up 19.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aldeyra vs. ImmuCell
Performance |
| Timeline |
| Aldeyra |
| ImmuCell |
Aldeyra and ImmuCell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldeyra and ImmuCell
The main advantage of trading using opposite Aldeyra and ImmuCell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldeyra position performs unexpectedly, ImmuCell 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 ImmuCell will offset losses from the drop in ImmuCell's long position.| Aldeyra vs. Tarsus Pharmaceuticals | Aldeyra vs. Travere Therapeutics | Aldeyra vs. Eton Pharmaceuticals | Aldeyra vs. Viridian Therapeutics |
| ImmuCell vs. Transgene SA | ImmuCell vs. Alpha Cognition | ImmuCell vs. Fennec Pharmaceuticals | ImmuCell vs. Lipella Pharmaceuticals Common |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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