Correlation Between Compugen and Collplant Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Compugen and Collplant Biotechnologies 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 Collplant Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compugen and Collplant Biotechnologies, you can compare the effects of market volatilities on Compugen and Collplant Biotechnologies 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 Collplant Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugen and Collplant Biotechnologies.
Diversification Opportunities for Compugen and Collplant Biotechnologies
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compugen and Collplant is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Compugen and Collplant Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collplant Biotechnologies 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 Collplant Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collplant Biotechnologies has no effect on the direction of Compugen i.e., Compugen and Collplant Biotechnologies go up and down completely randomly.
Pair Corralation between Compugen and Collplant Biotechnologies
Given the investment horizon of 90 days Compugen is expected to generate 2.26 times more return on investment than Collplant Biotechnologies. However, Compugen is 2.26 times more volatile than Collplant Biotechnologies. It trades about 0.04 of its potential returns per unit of risk. Collplant Biotechnologies is currently generating about -0.01 per unit of risk. If you would invest 104.00 in Compugen on August 30, 2024 and sell it today you would earn a total of 57.00 from holding Compugen or generate 54.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compugen vs. Collplant Biotechnologies
Performance |
| Timeline |
| Compugen |
| Collplant Biotechnologies |
Compugen and Collplant Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugen and Collplant Biotechnologies
The main advantage of trading using opposite Compugen and Collplant Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugen position performs unexpectedly, Collplant Biotechnologies 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 Collplant Biotechnologies will offset losses from the drop in Collplant Biotechnologies' long position.The idea behind Compugen and Collplant Biotechnologies 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.| Collplant Biotechnologies vs. Keros Therapeutics | Collplant Biotechnologies vs. Merus BV | Collplant Biotechnologies vs. Vericel Corp Ord | Collplant Biotechnologies vs. Century Therapeutics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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