Correlation Between Lineage Cell and Tadir Gan

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

By analyzing existing cross correlation between Lineage Cell Therapeutics and Tadir Gan 1993, you can compare the effects of market volatilities on Lineage Cell and Tadir Gan 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 Lineage Cell with a short position of Tadir Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lineage Cell and Tadir Gan.

Diversification Opportunities for Lineage Cell and Tadir Gan

-0.37

Correlation Coefficient

Lineage Cell  Tadir Gan

Very good diversification

The 3 months correlation between Lineage and Tadir is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lineage Cell Therapeutics and Tadir Gan 1993 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tadir Gan 1993 and Lineage Cell 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 Lineage Cell Therapeutics are associated (or correlated) with Tadir Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tadir Gan 1993 has no effect on the direction of Lineage Cell i.e., Lineage Cell and Tadir Gan go up and down completely randomly.

Pair Corralation between Lineage Cell and Tadir Gan

Assuming the 90 days trading horizon Lineage Cell Therapeutics is expected to under-perform the Tadir Gan. In addition to that, Lineage Cell is 1.82 times more volatile than Tadir Gan 1993. It trades about -0.13 of its total potential returns per unit of risk. Tadir Gan 1993 is currently generating about 0.0 per unit of volatility. If you would invest  18,280  in Tadir Gan 1993 on September 26, 2024 and sell it today you would lose (580.00) from holding Tadir Gan 1993 or give up 3.17% of portfolio value over 90 days.

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

Lineage Cell Therapeutics  vs.  Tadir Gan 1993

Lineage Cell Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lineage Cell Therapeutics 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.

Tadir Gan 1993

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Tadir Gan 1993 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tadir Gan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lineage Cell and Tadir Gan

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

The idea behind Lineage Cell Therapeutics and Tadir Gan 1993 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.