Correlation Between Compugen and Checkpoint Therapeutics
Can any of the company-specific risk be diversified away by investing in both Compugen and Checkpoint 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 Compugen and Checkpoint Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compugen and Checkpoint Therapeutics, you can compare the effects of market volatilities on Compugen and Checkpoint 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 Compugen with a short position of Checkpoint Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugen and Checkpoint Therapeutics.
Diversification Opportunities for Compugen and Checkpoint Therapeutics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compugen and Checkpoint is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Compugen and Checkpoint Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Checkpoint 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 Checkpoint Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Checkpoint Therapeutics has no effect on the direction of Compugen i.e., Compugen and Checkpoint Therapeutics go up and down completely randomly.
Pair Corralation between Compugen and Checkpoint Therapeutics
Given the investment horizon of 90 days Compugen is expected to under-perform the Checkpoint Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Compugen is 1.29 times less risky than Checkpoint Therapeutics. The stock trades about -0.22 of its potential returns per unit of risk. The Checkpoint Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 367.00 in Checkpoint Therapeutics on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Checkpoint Therapeutics or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugen vs. Checkpoint Therapeutics
Performance |
| Timeline |
| Compugen |
| Checkpoint Therapeutics |
Compugen and Checkpoint Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugen and Checkpoint Therapeutics
The main advantage of trading using opposite Compugen and Checkpoint Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugen position performs unexpectedly, Checkpoint 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 Checkpoint Therapeutics will offset losses from the drop in Checkpoint Therapeutics' long position.The idea behind Compugen and Checkpoint 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.| Checkpoint Therapeutics vs. Mustang Bio | Checkpoint Therapeutics vs. Reviva Pharmaceuticals Holdings | Checkpoint Therapeutics vs. Fortress Biotech Pref | Checkpoint Therapeutics vs. Kodiak Sciences |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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