Correlation Between Vericel Corp and Sol Gel
Can any of the company-specific risk be diversified away by investing in both Vericel Corp and Sol Gel 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 Vericel Corp and Sol Gel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vericel Corp Ord and Sol Gel Technologies, you can compare the effects of market volatilities on Vericel Corp and Sol Gel 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 Vericel Corp with a short position of Sol Gel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Sol Gel.
Diversification Opportunities for Vericel Corp and Sol Gel
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vericel and Sol is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Sol Gel Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sol Gel Technologies and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Sol Gel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sol Gel Technologies has no effect on the direction of Vericel Corp i.e., Vericel Corp and Sol Gel go up and down completely randomly.
Pair Corralation between Vericel Corp and Sol Gel
Given the investment horizon of 90 days Vericel Corp is expected to generate 1.3 times less return on investment than Sol Gel. But when comparing it to its historical volatility, Vericel Corp Ord is 4.95 times less risky than Sol Gel. It trades about 0.07 of its potential returns per unit of risk. Sol Gel Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 432.00 in Sol Gel Technologies on September 26, 2024 and sell it today you would lose (267.00) from holding Sol Gel Technologies or give up 61.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vericel Corp Ord vs. Sol Gel Technologies
Performance |
| Timeline |
| Vericel Corp Ord |
| Sol Gel Technologies |
Vericel Corp and Sol Gel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vericel Corp and Sol Gel
The main advantage of trading using opposite Vericel Corp and Sol Gel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp position performs unexpectedly, Sol Gel 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 Sol Gel will offset losses from the drop in Sol Gel's long position.| Vericel Corp vs. Fate Therapeutics | Vericel Corp vs. Caribou Biosciences | Vericel Corp vs. Karyopharm Therapeutics | Vericel Corp vs. Hookipa Pharma |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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