Correlation Between Cognition Therapeutics and NLS Pharmaceutics
Can any of the company-specific risk be diversified away by investing in both Cognition Therapeutics and NLS Pharmaceutics 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 Cognition Therapeutics and NLS Pharmaceutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognition Therapeutics and NLS Pharmaceutics AG, you can compare the effects of market volatilities on Cognition Therapeutics and NLS Pharmaceutics 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 Cognition Therapeutics with a short position of NLS Pharmaceutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognition Therapeutics and NLS Pharmaceutics.
Diversification Opportunities for Cognition Therapeutics and NLS Pharmaceutics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cognition and NLS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cognition Therapeutics and NLS Pharmaceutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLS Pharmaceutics and Cognition Therapeutics 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 Cognition Therapeutics are associated (or correlated) with NLS Pharmaceutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLS Pharmaceutics has no effect on the direction of Cognition Therapeutics i.e., Cognition Therapeutics and NLS Pharmaceutics go up and down completely randomly.
Pair Corralation between Cognition Therapeutics and NLS Pharmaceutics
Given the investment horizon of 90 days Cognition Therapeutics is expected to under-perform the NLS Pharmaceutics. But the stock apears to be less risky and, when comparing its historical volatility, Cognition Therapeutics is 1.05 times less risky than NLS Pharmaceutics. The stock trades about -0.14 of its potential returns per unit of risk. The NLS Pharmaceutics AG is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 411.00 in NLS Pharmaceutics AG on August 27, 2024 and sell it today you would lose (68.00) from holding NLS Pharmaceutics AG or give up 16.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognition Therapeutics vs. NLS Pharmaceutics AG
Performance |
| Timeline |
| Cognition Therapeutics |
| NLS Pharmaceutics |
Cognition Therapeutics and NLS Pharmaceutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognition Therapeutics and NLS Pharmaceutics
The main advantage of trading using opposite Cognition Therapeutics and NLS Pharmaceutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognition Therapeutics position performs unexpectedly, NLS Pharmaceutics 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 NLS Pharmaceutics will offset losses from the drop in NLS Pharmaceutics' long position.| Cognition Therapeutics vs. Reviva Pharmaceuticals Holdings | Cognition Therapeutics vs. Eyenovia | Cognition Therapeutics vs. Transcode Therapeutics | Cognition Therapeutics vs. Kodiak Sciences |
| NLS Pharmaceutics vs. Eliem Therapeutics | NLS Pharmaceutics vs. HCW Biologics | NLS Pharmaceutics vs. Scpharmaceuticals | NLS Pharmaceutics vs. Milestone Pharmaceuticals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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