Correlation Between Compugen and Purple Biotech
Can any of the company-specific risk be diversified away by investing in both Compugen and Purple Biotech 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 Purple Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compugen and Purple Biotech, you can compare the effects of market volatilities on Compugen and Purple Biotech 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 Purple Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugen and Purple Biotech.
Diversification Opportunities for Compugen and Purple Biotech
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compugen and Purple is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Compugen and Purple Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purple Biotech 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 Purple Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purple Biotech has no effect on the direction of Compugen i.e., Compugen and Purple Biotech go up and down completely randomly.
Pair Corralation between Compugen and Purple Biotech
Assuming the 90 days trading horizon Compugen is expected to generate 1.26 times more return on investment than Purple Biotech. However, Compugen is 1.26 times more volatile than Purple Biotech. It trades about 0.05 of its potential returns per unit of risk. Purple Biotech is currently generating about -0.02 per unit of risk. If you would invest 31,450 in Compugen on September 4, 2024 and sell it today you would earn a total of 23,910 from holding Compugen or generate 76.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugen vs. Purple Biotech
Performance |
| Timeline |
| Compugen |
| Purple Biotech |
Compugen and Purple Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugen and Purple Biotech
The main advantage of trading using opposite Compugen and Purple Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugen position performs unexpectedly, Purple Biotech 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 Purple Biotech will offset losses from the drop in Purple Biotech's long position.| Compugen vs. Purple Biotech | Compugen vs. BioLine RX | Compugen vs. Clal Biotechnology Industries | Compugen vs. Evogene |
| Purple Biotech vs. B Communications | Purple Biotech vs. Computer Direct | Purple Biotech vs. Suny Cellular Communication | Purple Biotech vs. Iargento Hi Tech |
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 CEOs Directory module to screen CEOs from public companies around the world.
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