Correlation Between Cumberland Pharmaceuticals and BGC
Can any of the company-specific risk be diversified away by investing in both Cumberland Pharmaceuticals and BGC 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 Cumberland Pharmaceuticals and BGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumberland Pharmaceuticals and BGC Group, you can compare the effects of market volatilities on Cumberland Pharmaceuticals and BGC 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 Cumberland Pharmaceuticals with a short position of BGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumberland Pharmaceuticals and BGC.
Diversification Opportunities for Cumberland Pharmaceuticals and BGC
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumberland and BGC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals are associated (or correlated) with BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and BGC go up and down completely randomly.
Pair Corralation between Cumberland Pharmaceuticals and BGC
Given the investment horizon of 90 days Cumberland Pharmaceuticals is expected to under-perform the BGC. But the stock apears to be less risky and, when comparing its historical volatility, Cumberland Pharmaceuticals is 1.37 times less risky than BGC. The stock trades about -0.34 of its potential returns per unit of risk. The BGC Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 934.00 in BGC Group on August 28, 2024 and sell it today you would earn a total of 42.00 from holding BGC Group or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumberland Pharmaceuticals vs. BGC Group
Performance |
| Timeline |
| Cumberland Pharmaceuticals |
| BGC Group |
Cumberland Pharmaceuticals and BGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumberland Pharmaceuticals and BGC
The main advantage of trading using opposite Cumberland Pharmaceuticals and BGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumberland Pharmaceuticals position performs unexpectedly, BGC 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 BGC will offset losses from the drop in BGC's long position.| Cumberland Pharmaceuticals vs. Capricor Therapeutics | Cumberland Pharmaceuticals vs. Soleno Therapeutics | Cumberland Pharmaceuticals vs. Bio Path Holdings | Cumberland Pharmaceuticals vs. Moleculin Biotech |
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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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