Correlation Between Galera Therapeutics and PreveCeutical Medical
Can any of the company-specific risk be diversified away by investing in both Galera Therapeutics and PreveCeutical Medical 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 Galera Therapeutics and PreveCeutical Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galera Therapeutics and PreveCeutical Medical, you can compare the effects of market volatilities on Galera Therapeutics and PreveCeutical Medical 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 Galera Therapeutics with a short position of PreveCeutical Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galera Therapeutics and PreveCeutical Medical.
Diversification Opportunities for Galera Therapeutics and PreveCeutical Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Galera and PreveCeutical is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Galera Therapeutics and PreveCeutical Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PreveCeutical Medical and Galera 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 Galera Therapeutics are associated (or correlated) with PreveCeutical Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PreveCeutical Medical has no effect on the direction of Galera Therapeutics i.e., Galera Therapeutics and PreveCeutical Medical go up and down completely randomly.
Pair Corralation between Galera Therapeutics and PreveCeutical Medical
Given the investment horizon of 90 days Galera Therapeutics is expected to generate 1.34 times less return on investment than PreveCeutical Medical. But when comparing it to its historical volatility, Galera Therapeutics is 2.16 times less risky than PreveCeutical Medical. It trades about 0.08 of its potential returns per unit of risk. PreveCeutical Medical is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.80 in PreveCeutical Medical on September 5, 2024 and sell it today you would lose (0.36) from holding PreveCeutical Medical or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.57% |
| Values | Daily Returns |
Galera Therapeutics vs. PreveCeutical Medical
Performance |
| Timeline |
| Galera Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PreveCeutical Medical |
Galera Therapeutics and PreveCeutical Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galera Therapeutics and PreveCeutical Medical
The main advantage of trading using opposite Galera Therapeutics and PreveCeutical Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galera Therapeutics position performs unexpectedly, PreveCeutical Medical 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 PreveCeutical Medical will offset losses from the drop in PreveCeutical Medical's long position.| Galera Therapeutics vs. Mereo BioPharma Group | Galera Therapeutics vs. Terns Pharmaceuticals | Galera Therapeutics vs. PDS Biotechnology Corp | Galera Therapeutics vs. Inozyme Pharma |
| PreveCeutical Medical vs. Vg Life Sciences | PreveCeutical Medical vs. Adagene | PreveCeutical Medical vs. Marizyme | PreveCeutical Medical vs. Mymetics Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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