Correlation Between Celularity and EQRx
Can any of the company-specific risk be diversified away by investing in both Celularity and EQRx 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 Celularity and EQRx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celularity and EQRx Inc, you can compare the effects of market volatilities on Celularity and EQRx 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 Celularity with a short position of EQRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celularity and EQRx.
Diversification Opportunities for Celularity and EQRx
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Celularity and EQRx is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Celularity and EQRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQRx Inc and Celularity 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 Celularity are associated (or correlated) with EQRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQRx Inc has no effect on the direction of Celularity i.e., Celularity and EQRx go up and down completely randomly.
Pair Corralation between Celularity and EQRx
Assuming the 90 days horizon Celularity is expected to generate 7.27 times more return on investment than EQRx. However, Celularity is 7.27 times more volatile than EQRx Inc. It trades about 0.11 of its potential returns per unit of risk. EQRx Inc is currently generating about 0.05 per unit of risk. If you would invest 7.28 in Celularity on November 2, 2024 and sell it today you would lose (0.68) from holding Celularity or give up 9.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 26.67% |
| Values | Daily Returns |
Celularity vs. EQRx Inc
Performance |
| Timeline |
| Celularity |
| EQRx Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Celularity and EQRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celularity and EQRx
The main advantage of trading using opposite Celularity and EQRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celularity position performs unexpectedly, EQRx 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 EQRx will offset losses from the drop in EQRx's long position.The idea behind Celularity and EQRx Inc 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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