Correlation Between Abcellera Biologics and Deluxe

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

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

Diversification Opportunities for Abcellera Biologics and Deluxe

0.54

Correlation Coefficient

Abcellera Biologics  Deluxe

Very weak diversification

The 3 months correlation between Abcellera and Deluxe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Abcellera Biologics and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe and Abcellera Biologics 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 Abcellera Biologics are associated (or correlated) with Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Abcellera Biologics i.e., Abcellera Biologics and Deluxe go up and down completely randomly.

Pair Corralation between Abcellera Biologics and Deluxe

Given the investment horizon of 90 days Abcellera Biologics is expected to generate 1.7 times more return on investment than Deluxe. However, Abcellera Biologics is 1.7 times more volatile than Deluxe. It trades about 0.09 of its potential returns per unit of risk. Deluxe is currently generating about 0.13 per unit of risk. If you would invest  250.00  in Abcellera Biologics on September 2, 2024 and sell it today you would earn a total of  51.00  from holding Abcellera Biologics or generate 20.4% return on investment over 90 days.

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

Abcellera Biologics  vs.  Deluxe

Abcellera Biologics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abcellera Biologics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Abcellera Biologics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Deluxe

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Deluxe are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Deluxe showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abcellera Biologics and Deluxe

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

The idea behind Abcellera Biologics and Deluxe 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.