Correlation Between Effector Therapeutics and CohBar
Can any of the company-specific risk be diversified away by investing in both Effector Therapeutics and CohBar 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 Effector Therapeutics and CohBar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Effector Therapeutics and CohBar Inc, you can compare the effects of market volatilities on Effector Therapeutics and CohBar 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 Effector Therapeutics with a short position of CohBar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Effector Therapeutics and CohBar.
Diversification Opportunities for Effector Therapeutics and CohBar
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Effector and CohBar is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Effector Therapeutics and CohBar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CohBar Inc and Effector 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 Effector Therapeutics are associated (or correlated) with CohBar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CohBar Inc has no effect on the direction of Effector Therapeutics i.e., Effector Therapeutics and CohBar go up and down completely randomly.
Pair Corralation between Effector Therapeutics and CohBar
Given the investment horizon of 90 days Effector Therapeutics is expected to under-perform the CohBar. But the stock apears to be less risky and, when comparing its historical volatility, Effector Therapeutics is 1.95 times less risky than CohBar. The stock trades about -0.04 of its potential returns per unit of risk. The CohBar Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 171.00 in CohBar Inc on August 27, 2024 and sell it today you would earn a total of 128.00 from holding CohBar Inc or generate 74.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.9% |
| Values | Daily Returns |
Effector Therapeutics vs. CohBar Inc
Performance |
| Timeline |
| Effector Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CohBar Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Effector Therapeutics and CohBar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Effector Therapeutics and CohBar
The main advantage of trading using opposite Effector Therapeutics and CohBar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Effector Therapeutics position performs unexpectedly, CohBar 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 CohBar will offset losses from the drop in CohBar's long position.| Effector Therapeutics vs. Indaptus Therapeutics | Effector Therapeutics vs. Jasper Therapeutics | Effector Therapeutics vs. RenovoRx | Effector Therapeutics vs. Ensysce Biosciences |
| CohBar vs. Enveric Biosciences | CohBar vs. Elevation Oncology | CohBar vs. Hepion Pharmaceuticals | CohBar vs. Zura Bio Limited |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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