Correlation Between Celcuity LLC and C4 Therapeutics

Can any of the company-specific risk be diversified away by investing in both Celcuity LLC and C4 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 Celcuity LLC and C4 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Celcuity LLC and C4 Therapeutics, you can compare the effects of market volatilities on Celcuity LLC and C4 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 Celcuity LLC with a short position of C4 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celcuity LLC and C4 Therapeutics.

Diversification Opportunities for Celcuity LLC and C4 Therapeutics

0.78

Correlation Coefficient

Celcuity LLC  C4 Therapeutics

Poor diversification

The 3 months correlation between Celcuity and CCCC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Celcuity LLC and C4 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C4 Therapeutics and Celcuity LLC 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 Celcuity LLC are associated (or correlated) with C4 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C4 Therapeutics has no effect on the direction of Celcuity LLC i.e., Celcuity LLC and C4 Therapeutics go up and down completely randomly.

Pair Corralation between Celcuity LLC and C4 Therapeutics

Given the investment horizon of 90 days Celcuity LLC is expected to generate 0.6 times more return on investment than C4 Therapeutics. However, Celcuity LLC is 1.66 times less risky than C4 Therapeutics. It trades about -0.09 of its potential returns per unit of risk. C4 Therapeutics is currently generating about -0.06 per unit of risk. If you would invest  1,562  in Celcuity LLC on September 2, 2024 and sell it today you would lose (282.00) from holding Celcuity LLC or give up 18.05% of portfolio value over 90 days.

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

Celcuity LLC  vs.  C4 Therapeutics

Celcuity LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celcuity LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

C4 Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C4 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Celcuity LLC and C4 Therapeutics

The main advantage of trading using opposite Celcuity LLC and C4 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celcuity LLC position performs unexpectedly, C4 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 C4 Therapeutics will offset losses from the drop in C4 Therapeutics' long position.

The idea behind Celcuity LLC and C4 Therapeutics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.