Correlation Between Verastem and Brainstorm Cell
Can any of the company-specific risk be diversified away by investing in both Verastem and Brainstorm Cell 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 Verastem and Brainstorm Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verastem and Brainstorm Cell Therapeutics, you can compare the effects of market volatilities on Verastem and Brainstorm Cell 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 Verastem with a short position of Brainstorm Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verastem and Brainstorm Cell.
Diversification Opportunities for Verastem and Brainstorm Cell
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Verastem and Brainstorm is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Verastem and Brainstorm Cell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainstorm Cell Ther and Verastem 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 Verastem are associated (or correlated) with Brainstorm Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainstorm Cell Ther has no effect on the direction of Verastem i.e., Verastem and Brainstorm Cell go up and down completely randomly.
Pair Corralation between Verastem and Brainstorm Cell
Given the investment horizon of 90 days Verastem is expected to generate 0.95 times more return on investment than Brainstorm Cell. However, Verastem is 1.05 times less risky than Brainstorm Cell. It trades about 0.04 of its potential returns per unit of risk. Brainstorm Cell Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 541.00 in Verastem on September 3, 2024 and sell it today you would lose (7.00) from holding Verastem or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verastem vs. Brainstorm Cell Therapeutics
Performance |
| Timeline |
| Verastem |
| Brainstorm Cell Ther |
Verastem and Brainstorm Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verastem and Brainstorm Cell
The main advantage of trading using opposite Verastem and Brainstorm Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verastem position performs unexpectedly, Brainstorm Cell 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 Brainstorm Cell will offset losses from the drop in Brainstorm Cell's long position.The idea behind Verastem and Brainstorm Cell Therapeutics 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.| Brainstorm Cell vs. Protalix Biotherapeutics | Brainstorm Cell vs. Corvus Pharmaceuticals | Brainstorm Cell vs. Aldeyra | Brainstorm Cell vs. Checkpoint Therapeutics |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |