Correlation Between CEL SCI and Cyclacel Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both CEL SCI and Cyclacel Pharmaceuticals 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 CEL SCI and Cyclacel Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEL SCI Corp and Cyclacel Pharmaceuticals, you can compare the effects of market volatilities on CEL SCI and Cyclacel Pharmaceuticals 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 CEL SCI with a short position of Cyclacel Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEL SCI and Cyclacel Pharmaceuticals.
Diversification Opportunities for CEL SCI and Cyclacel Pharmaceuticals
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CEL and Cyclacel is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CEL SCI Corp and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals and CEL SCI 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 CEL SCI Corp are associated (or correlated) with Cyclacel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclacel Pharmaceuticals has no effect on the direction of CEL SCI i.e., CEL SCI and Cyclacel Pharmaceuticals go up and down completely randomly.
Pair Corralation between CEL SCI and Cyclacel Pharmaceuticals
Considering the 90-day investment horizon CEL SCI Corp is expected to generate 0.72 times more return on investment than Cyclacel Pharmaceuticals. However, CEL SCI Corp is 1.39 times less risky than Cyclacel Pharmaceuticals. It trades about -0.03 of its potential returns per unit of risk. Cyclacel Pharmaceuticals is currently generating about -0.06 per unit of risk. If you would invest 246.00 in CEL SCI Corp on September 2, 2024 and sell it today you would lose (180.00) from holding CEL SCI Corp or give up 73.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEL SCI Corp vs. Cyclacel Pharmaceuticals
Performance |
| Timeline |
| CEL SCI Corp |
| Cyclacel Pharmaceuticals |
CEL SCI and Cyclacel Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEL SCI and Cyclacel Pharmaceuticals
The main advantage of trading using opposite CEL SCI and Cyclacel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEL SCI position performs unexpectedly, Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals will offset losses from the drop in Cyclacel Pharmaceuticals' long position.The idea behind CEL SCI Corp and Cyclacel Pharmaceuticals 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.| Cyclacel Pharmaceuticals vs. Eliem Therapeutics | Cyclacel Pharmaceuticals vs. Ikena Oncology | Cyclacel Pharmaceuticals vs. Ovid Therapeutics | Cyclacel Pharmaceuticals vs. Connect Biopharma Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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