Correlation Between Celltrion Pharm and ALTEOGEN

Can any of the company-specific risk be diversified away by investing in both Celltrion Pharm and ALTEOGEN 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 Celltrion Pharm and ALTEOGEN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Celltrion Pharm and ALTEOGEN, you can compare the effects of market volatilities on Celltrion Pharm and ALTEOGEN 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 Celltrion Pharm with a short position of ALTEOGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celltrion Pharm and ALTEOGEN.

Diversification Opportunities for Celltrion Pharm and ALTEOGEN

0.27

Correlation Coefficient

Celltrion Pharm  ALTEOGEN

Modest diversification

The 3 months correlation between Celltrion and ALTEOGEN is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Celltrion Pharm and ALTEOGEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTEOGEN and Celltrion Pharm 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 Celltrion Pharm are associated (or correlated) with ALTEOGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTEOGEN has no effect on the direction of Celltrion Pharm i.e., Celltrion Pharm and ALTEOGEN go up and down completely randomly.

Pair Corralation between Celltrion Pharm and ALTEOGEN

Assuming the 90 days trading horizon Celltrion Pharm is expected to under-perform the ALTEOGEN. But the stock apears to be less risky and, when comparing its historical volatility, Celltrion Pharm is 1.71 times less risky than ALTEOGEN. The stock trades about -0.07 of its potential returns per unit of risk. The ALTEOGEN is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  33,600,000  in ALTEOGEN on October 1, 2024 and sell it today you would lose (3,500,000) from holding ALTEOGEN or give up 10.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Celltrion Pharm  vs.  ALTEOGEN

Celltrion Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celltrion Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ALTEOGEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALTEOGEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALTEOGEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Celltrion Pharm and ALTEOGEN

The main advantage of trading using opposite Celltrion Pharm and ALTEOGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celltrion Pharm position performs unexpectedly, ALTEOGEN 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 ALTEOGEN will offset losses from the drop in ALTEOGEN's long position.

The idea behind Celltrion Pharm and ALTEOGEN 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.