Correlation Between Bellicum Pharmaceuticals and Lipella Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bellicum Pharmaceuticals and Lipella Pharmaceuticals 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 Bellicum Pharmaceuticals and Lipella Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellicum Pharmaceuticals and Lipella Pharmaceuticals Common, you can compare the effects of market volatilities on Bellicum Pharmaceuticals and Lipella Pharmaceuticals 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 Bellicum Pharmaceuticals with a short position of Lipella Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellicum Pharmaceuticals and Lipella Pharmaceuticals.
Diversification Opportunities for Bellicum Pharmaceuticals and Lipella Pharmaceuticals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bellicum and Lipella is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bellicum Pharmaceuticals and Lipella Pharmaceuticals Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipella Pharmaceuticals and Bellicum 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 Bellicum Pharmaceuticals are associated (or correlated) with Lipella Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipella Pharmaceuticals has no effect on the direction of Bellicum Pharmaceuticals i.e., Bellicum Pharmaceuticals and Lipella Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bellicum Pharmaceuticals and Lipella Pharmaceuticals
Given the investment horizon of 90 days Bellicum Pharmaceuticals is expected to generate 1.4 times less return on investment than Lipella Pharmaceuticals. But when comparing it to its historical volatility, Bellicum Pharmaceuticals is 1.35 times less risky than Lipella Pharmaceuticals. It trades about 0.03 of its potential returns per unit of risk. Lipella Pharmaceuticals Common is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Lipella Pharmaceuticals Common on August 30, 2024 and sell it today you would lose (280.00) from holding Lipella Pharmaceuticals Common or give up 48.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.71% |
| Values | Daily Returns |
Bellicum Pharmaceuticals vs. Lipella Pharmaceuticals Common
Performance |
| Timeline |
| Bellicum Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lipella Pharmaceuticals |
Bellicum Pharmaceuticals and Lipella Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellicum Pharmaceuticals and Lipella Pharmaceuticals
The main advantage of trading using opposite Bellicum Pharmaceuticals and Lipella Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellicum Pharmaceuticals position performs unexpectedly, Lipella Pharmaceuticals 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 Lipella Pharmaceuticals will offset losses from the drop in Lipella Pharmaceuticals' long position.| Bellicum Pharmaceuticals vs. Cellectis SA | Bellicum Pharmaceuticals vs. Adaptimmune Therapeutics Plc | Bellicum Pharmaceuticals vs. Atara Biotherapeutics | Bellicum Pharmaceuticals vs. Affimed NV |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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