Correlation Between Chia and Elicera Therapeutics
Can any of the company-specific risk be diversified away by investing in both Chia and Elicera 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 Chia and Elicera Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and Elicera Therapeutics AB, you can compare the effects of market volatilities on Chia and Elicera 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 Chia with a short position of Elicera Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Elicera Therapeutics.
Diversification Opportunities for Chia and Elicera Therapeutics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chia and Elicera is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Elicera Therapeutics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicera Therapeutics and Chia 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 Chia are associated (or correlated) with Elicera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicera Therapeutics has no effect on the direction of Chia i.e., Chia and Elicera Therapeutics go up and down completely randomly.
Pair Corralation between Chia and Elicera Therapeutics
Assuming the 90 days trading horizon Chia is expected to under-perform the Elicera Therapeutics. In addition to that, Chia is 1.47 times more volatile than Elicera Therapeutics AB. It trades about -0.02 of its total potential returns per unit of risk. Elicera Therapeutics AB is currently generating about 0.23 per unit of volatility. If you would invest 167.00 in Elicera Therapeutics AB on October 9, 2024 and sell it today you would earn a total of 22.00 from holding Elicera Therapeutics AB or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Chia vs. Elicera Therapeutics AB
Performance |
| Timeline |
| Chia |
| Elicera Therapeutics |
Chia and Elicera Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and Elicera Therapeutics
The main advantage of trading using opposite Chia and Elicera Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, Elicera 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 Elicera Therapeutics will offset losses from the drop in Elicera Therapeutics' long position.The idea behind Chia and Elicera Therapeutics AB 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.| Elicera Therapeutics vs. Cantargia AB | Elicera Therapeutics vs. Ascelia Pharma AB | Elicera Therapeutics vs. Cyxone AB | Elicera Therapeutics vs. BioArctic AB |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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