Correlation Between Protagenic Therapeutics and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Protagenic Therapeutics and WuXi AppTec 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 Protagenic Therapeutics and WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protagenic Therapeutics and WuXi AppTec Co, you can compare the effects of market volatilities on Protagenic Therapeutics and WuXi AppTec 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 Protagenic Therapeutics with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protagenic Therapeutics and WuXi AppTec.
Diversification Opportunities for Protagenic Therapeutics and WuXi AppTec
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Protagenic and WuXi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Protagenic Therapeutics and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and Protagenic 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 Protagenic Therapeutics are associated (or correlated) with WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Protagenic Therapeutics i.e., Protagenic Therapeutics and WuXi AppTec go up and down completely randomly.
Pair Corralation between Protagenic Therapeutics and WuXi AppTec
Assuming the 90 days horizon Protagenic Therapeutics is expected to generate 38.12 times more return on investment than WuXi AppTec. However, Protagenic Therapeutics is 38.12 times more volatile than WuXi AppTec Co. It trades about 0.18 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.0 per unit of risk. If you would invest 2.01 in Protagenic Therapeutics on September 3, 2024 and sell it today you would lose (0.88) from holding Protagenic Therapeutics or give up 43.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 40.61% |
| Values | Daily Returns |
Protagenic Therapeutics vs. WuXi AppTec Co
Performance |
| Timeline |
| Protagenic Therapeutics |
| WuXi AppTec |
Protagenic Therapeutics and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protagenic Therapeutics and WuXi AppTec
The main advantage of trading using opposite Protagenic Therapeutics and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagenic Therapeutics position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.The idea behind Protagenic Therapeutics and WuXi AppTec Co 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.| WuXi AppTec vs. Neuronetics | WuXi AppTec vs. Intelligent Bio Solutions | WuXi AppTec vs. Biodesix | WuXi AppTec vs. Precipio |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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