Correlation Between EQRx and Cingulate
Can any of the company-specific risk be diversified away by investing in both EQRx and Cingulate 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 EQRx and Cingulate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQRx Inc and Cingulate, you can compare the effects of market volatilities on EQRx and Cingulate 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 EQRx with a short position of Cingulate. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQRx and Cingulate.
Diversification Opportunities for EQRx and Cingulate
Pay attention - limited upside
The 3 months correlation between EQRx and Cingulate is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EQRx Inc and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate and EQRx 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 EQRx Inc are associated (or correlated) with Cingulate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate has no effect on the direction of EQRx i.e., EQRx and Cingulate go up and down completely randomly.
Pair Corralation between EQRx and Cingulate
Assuming the 90 days horizon EQRx Inc is expected to generate 0.75 times more return on investment than Cingulate. However, EQRx Inc is 1.33 times less risky than Cingulate. It trades about 0.03 of its potential returns per unit of risk. Cingulate is currently generating about 0.01 per unit of risk. If you would invest 35.00 in EQRx Inc on October 21, 2024 and sell it today you would lose (16.00) from holding EQRx Inc or give up 45.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.79% |
| Values | Daily Returns |
EQRx Inc vs. Cingulate
Performance |
| Timeline |
| EQRx Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cingulate |
EQRx and Cingulate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQRx and Cingulate
The main advantage of trading using opposite EQRx and Cingulate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQRx position performs unexpectedly, Cingulate 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 Cingulate will offset losses from the drop in Cingulate's long position.The idea behind EQRx Inc and Cingulate 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.| Cingulate vs. SAB Biotherapeutics | Cingulate vs. Senti Biosciences | Cingulate vs. Aerovate Therapeutics | Cingulate vs. Adagene |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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