Correlation Between Century Therapeutics and Anika Therapeutics
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Anika Therapeutics 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 Century Therapeutics and Anika Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Anika Therapeutics, you can compare the effects of market volatilities on Century Therapeutics and Anika Therapeutics 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 Century Therapeutics with a short position of Anika Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Anika Therapeutics.
Diversification Opportunities for Century Therapeutics and Anika Therapeutics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Anika is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and Century 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 Century Therapeutics are associated (or correlated) with Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Anika Therapeutics go up and down completely randomly.
Pair Corralation between Century Therapeutics and Anika Therapeutics
Given the investment horizon of 90 days Century Therapeutics is expected to generate 2.19 times more return on investment than Anika Therapeutics. However, Century Therapeutics is 2.19 times more volatile than Anika Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Anika Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 341.00 in Century Therapeutics on August 31, 2024 and sell it today you would lose (169.00) from holding Century Therapeutics or give up 49.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Anika Therapeutics
Performance |
| Timeline |
| Century Therapeutics |
| Anika Therapeutics |
Century Therapeutics and Anika Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Anika Therapeutics
The main advantage of trading using opposite Century Therapeutics and Anika Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Anika Therapeutics 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 Anika Therapeutics will offset losses from the drop in Anika Therapeutics' long position.| Century Therapeutics vs. Edgewise Therapeutics | Century Therapeutics vs. C4 Therapeutics | Century Therapeutics vs. Mineralys Therapeutics, Common | Century Therapeutics vs. Cullinan Oncology LLC |
| Anika Therapeutics vs. Axogen Inc | Anika Therapeutics vs. Orthofix Medical | Anika Therapeutics vs. SurModics | Anika Therapeutics vs. Paragon 28 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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