Correlation Between Curative Biosciences and Eisai

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

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

Diversification Opportunities for Curative Biosciences and Eisai

0.0

Correlation Coefficient

Curative Biosciences  Eisai

Pay attention - limited upside

The 3 months correlation between Curative and Eisai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Curative Biosciences and Eisai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eisai and Curative Biosciences 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 Curative Biosciences are associated (or correlated) with Eisai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eisai has no effect on the direction of Curative Biosciences i.e., Curative Biosciences and Eisai go up and down completely randomly.

Pair Corralation between Curative Biosciences and Eisai

Given the investment horizon of 90 days Curative Biosciences is expected to generate 2.9 times more return on investment than Eisai. However, Curative Biosciences is 2.9 times more volatile than Eisai Co. It trades about 0.01 of its potential returns per unit of risk. Eisai Co is currently generating about -0.04 per unit of risk. If you would invest  0.21  in Curative Biosciences on September 19, 2024 and sell it today you would lose (0.20) from holding Curative Biosciences or give up 95.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.55%
Values	Daily Returns

Curative Biosciences  vs.  Eisai Co

Curative Biosciences

Risk-Adjusted Performance

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Very Weak

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

Eisai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eisai Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Curative Biosciences and Eisai

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

The idea behind Curative Biosciences and Eisai Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.