Correlation Between Equillium and Oragenics
Can any of the company-specific risk be diversified away by investing in both Equillium and Oragenics 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 Equillium and Oragenics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Oragenics, you can compare the effects of market volatilities on Equillium and Oragenics 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 Equillium with a short position of Oragenics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Oragenics.
Diversification Opportunities for Equillium and Oragenics
Good diversification
The 3 months correlation between Equillium and Oragenics is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Oragenics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oragenics and Equillium 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 Equillium are associated (or correlated) with Oragenics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oragenics has no effect on the direction of Equillium i.e., Equillium and Oragenics go up and down completely randomly.
Pair Corralation between Equillium and Oragenics
Allowing for the 90-day total investment horizon Equillium is expected to under-perform the Oragenics. But the stock apears to be less risky and, when comparing its historical volatility, Equillium is 1.23 times less risky than Oragenics. The stock trades about -0.16 of its potential returns per unit of risk. The Oragenics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Oragenics on September 13, 2024 and sell it today you would lose (3.00) from holding Oragenics or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. Oragenics
Performance |
| Timeline |
| Equillium |
| Oragenics |
Equillium and Oragenics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and Oragenics
The main advantage of trading using opposite Equillium and Oragenics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, Oragenics 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 Oragenics will offset losses from the drop in Oragenics' long position.| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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