Correlation Between Cyclacel Pharmaceuticals and Hillstream Biopharma
Can any of the company-specific risk be diversified away by investing in both Cyclacel Pharmaceuticals and Hillstream Biopharma 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 Cyclacel Pharmaceuticals and Hillstream Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyclacel Pharmaceuticals and Hillstream Biopharma, you can compare the effects of market volatilities on Cyclacel Pharmaceuticals and Hillstream Biopharma 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 Cyclacel Pharmaceuticals with a short position of Hillstream Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyclacel Pharmaceuticals and Hillstream Biopharma.
Diversification Opportunities for Cyclacel Pharmaceuticals and Hillstream Biopharma
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cyclacel and Hillstream is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cyclacel Pharmaceuticals and Hillstream Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillstream Biopharma and Cyclacel 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 Cyclacel Pharmaceuticals are associated (or correlated) with Hillstream Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillstream Biopharma has no effect on the direction of Cyclacel Pharmaceuticals i.e., Cyclacel Pharmaceuticals and Hillstream Biopharma go up and down completely randomly.
Pair Corralation between Cyclacel Pharmaceuticals and Hillstream Biopharma
Given the investment horizon of 90 days Cyclacel Pharmaceuticals is expected to under-perform the Hillstream Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, Cyclacel Pharmaceuticals is 1.6 times less risky than Hillstream Biopharma. The stock trades about -0.05 of its potential returns per unit of risk. The Hillstream Biopharma is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Hillstream Biopharma on August 29, 2024 and sell it today you would lose (5.00) from holding Hillstream Biopharma or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.25% |
| Values | Daily Returns |
Cyclacel Pharmaceuticals vs. Hillstream Biopharma
Performance |
| Timeline |
| Cyclacel Pharmaceuticals |
| Hillstream Biopharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cyclacel Pharmaceuticals and Hillstream Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyclacel Pharmaceuticals and Hillstream Biopharma
The main advantage of trading using opposite Cyclacel Pharmaceuticals and Hillstream Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclacel Pharmaceuticals position performs unexpectedly, Hillstream Biopharma 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 Hillstream Biopharma will offset losses from the drop in Hillstream Biopharma's long position.| Cyclacel Pharmaceuticals vs. Eliem Therapeutics | Cyclacel Pharmaceuticals vs. Ikena Oncology | Cyclacel Pharmaceuticals vs. Ovid Therapeutics | Cyclacel Pharmaceuticals vs. Connect Biopharma Holdings |
| Hillstream Biopharma vs. Virax Biolabs Group | Hillstream Biopharma vs. Revelation Biosciences | Hillstream Biopharma vs. Kiora Pharmaceuticals | Hillstream Biopharma vs. ZyVersa 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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