Correlation Between Eton Pharmaceuticals and Precigen
Can any of the company-specific risk be diversified away by investing in both Eton Pharmaceuticals and Precigen 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 Eton Pharmaceuticals and Precigen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eton Pharmaceuticals and Precigen, you can compare the effects of market volatilities on Eton Pharmaceuticals and Precigen 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 Eton Pharmaceuticals with a short position of Precigen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eton Pharmaceuticals and Precigen.
Diversification Opportunities for Eton Pharmaceuticals and Precigen
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eton and Precigen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eton Pharmaceuticals and Precigen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precigen and Eton 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 Eton Pharmaceuticals are associated (or correlated) with Precigen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precigen has no effect on the direction of Eton Pharmaceuticals i.e., Eton Pharmaceuticals and Precigen go up and down completely randomly.
Pair Corralation between Eton Pharmaceuticals and Precigen
Given the investment horizon of 90 days Eton Pharmaceuticals is expected to generate 0.92 times more return on investment than Precigen. However, Eton Pharmaceuticals is 1.09 times less risky than Precigen. It trades about 0.09 of its potential returns per unit of risk. Precigen is currently generating about 0.01 per unit of risk. If you would invest 364.00 in Eton Pharmaceuticals on August 31, 2024 and sell it today you would earn a total of 910.00 from holding Eton Pharmaceuticals or generate 250.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eton Pharmaceuticals vs. Precigen
Performance |
Timeline |
Eton Pharmaceuticals |
Precigen |
Eton Pharmaceuticals and Precigen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eton Pharmaceuticals and Precigen
The main advantage of trading using opposite Eton Pharmaceuticals and Precigen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eton Pharmaceuticals position performs unexpectedly, Precigen 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 Precigen will offset losses from the drop in Precigen's long position.Eton Pharmaceuticals vs. Bausch Health Companies | Eton Pharmaceuticals vs. Haleon plc | Eton Pharmaceuticals vs. Intracellular Th |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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