Correlation Between Axcella Health and Cyclerion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Axcella Health and Cyclerion 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 Axcella Health and Cyclerion Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcella Health and Cyclerion Therapeutics, you can compare the effects of market volatilities on Axcella Health and Cyclerion 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 Axcella Health with a short position of Cyclerion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcella Health and Cyclerion Therapeutics.
Diversification Opportunities for Axcella Health and Cyclerion Therapeutics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axcella and Cyclerion is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Cyclerion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclerion Therapeutics and Axcella Health 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 Axcella Health are associated (or correlated) with Cyclerion Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclerion Therapeutics has no effect on the direction of Axcella Health i.e., Axcella Health and Cyclerion Therapeutics go up and down completely randomly.
Pair Corralation between Axcella Health and Cyclerion Therapeutics
If you would invest 335.00 in Cyclerion Therapeutics on August 25, 2024 and sell it today you would lose (192.00) from holding Cyclerion Therapeutics or give up 57.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.44% |
| Values | Daily Returns |
Axcella Health vs. Cyclerion Therapeutics
Performance |
| Timeline |
| Axcella Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cyclerion Therapeutics |
Axcella Health and Cyclerion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcella Health and Cyclerion Therapeutics
The main advantage of trading using opposite Axcella Health and Cyclerion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcella Health position performs unexpectedly, Cyclerion 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 Cyclerion Therapeutics will offset losses from the drop in Cyclerion Therapeutics' long position.| Axcella Health vs. Cyclerion Therapeutics | Axcella Health vs. Kezar Life Sciences | Axcella Health vs. CytomX Therapeutics | Axcella Health vs. Assembly Biosciences |
| Cyclerion Therapeutics vs. Kronos Bio | Cyclerion Therapeutics vs. Larimar Therapeutics | Cyclerion Therapeutics vs. Addex Therapeutics | Cyclerion Therapeutics vs. Achilles Therapeutics PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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