Correlation Between Living Cell and ALK Abell
Can any of the company-specific risk be diversified away by investing in both Living Cell and ALK Abell 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 Living Cell and ALK Abell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Living Cell Technologies and ALK Abell AS, you can compare the effects of market volatilities on Living Cell and ALK Abell 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 Living Cell with a short position of ALK Abell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Living Cell and ALK Abell.
Diversification Opportunities for Living Cell and ALK Abell
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Living and ALK is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Living Cell Technologies and ALK Abell AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALK Abell AS and Living Cell 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 Living Cell Technologies are associated (or correlated) with ALK Abell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALK Abell AS has no effect on the direction of Living Cell i.e., Living Cell and ALK Abell go up and down completely randomly.
Pair Corralation between Living Cell and ALK Abell
Assuming the 90 days horizon Living Cell Technologies is expected to generate 14.37 times more return on investment than ALK Abell. However, Living Cell is 14.37 times more volatile than ALK Abell AS. It trades about 0.05 of its potential returns per unit of risk. ALK Abell AS is currently generating about 0.06 per unit of risk. If you would invest 0.49 in Living Cell Technologies on September 19, 2024 and sell it today you would earn a total of 0.02 from holding Living Cell Technologies or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Living Cell Technologies vs. ALK Abell AS
Performance |
| Timeline |
| Living Cell Technologies |
| ALK Abell AS |
Living Cell and ALK Abell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Living Cell and ALK Abell
The main advantage of trading using opposite Living Cell and ALK Abell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Living Cell position performs unexpectedly, ALK Abell 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 ALK Abell will offset losses from the drop in ALK Abell's long position.| Living Cell vs. Defence Therapeutics | Living Cell vs. Aileron Therapeutics | Living Cell vs. Enlivex Therapeutics | Living Cell vs. Multicell Techs |
| ALK Abell vs. Defence Therapeutics | ALK Abell vs. Aileron Therapeutics | ALK Abell vs. Enlivex Therapeutics | ALK Abell vs. Living Cell Technologies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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