Correlation Between Compugen and Lineage Cell
Can any of the company-specific risk be diversified away by investing in both Compugen and Lineage Cell 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 Compugen and Lineage Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compugen and Lineage Cell Therapeutics, you can compare the effects of market volatilities on Compugen and Lineage Cell 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 Compugen with a short position of Lineage Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugen and Lineage Cell.
Diversification Opportunities for Compugen and Lineage Cell
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compugen and Lineage is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Compugen and Lineage Cell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lineage Cell Therapeutics and Compugen 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 Compugen are associated (or correlated) with Lineage Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lineage Cell Therapeutics has no effect on the direction of Compugen i.e., Compugen and Lineage Cell go up and down completely randomly.
Pair Corralation between Compugen and Lineage Cell
Assuming the 90 days trading horizon Compugen is expected to generate 1.95 times more return on investment than Lineage Cell. However, Compugen is 1.95 times more volatile than Lineage Cell Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Lineage Cell Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 34,030 in Compugen on September 1, 2024 and sell it today you would earn a total of 24,070 from holding Compugen or generate 70.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugen vs. Lineage Cell Therapeutics
Performance |
| Timeline |
| Compugen |
| Lineage Cell Therapeutics |
Compugen and Lineage Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugen and Lineage Cell
The main advantage of trading using opposite Compugen and Lineage Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugen position performs unexpectedly, Lineage Cell 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 Lineage Cell will offset losses from the drop in Lineage Cell's long position.The idea behind Compugen and Lineage Cell Therapeutics 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.| Lineage Cell vs. Enlivex Therapeutics | Lineage Cell vs. Compugen | Lineage Cell vs. Purple Biotech | Lineage Cell vs. BioLine RX |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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