Correlation Between Celularity and EFFECTOR Therapeutics

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

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

Diversification Opportunities for Celularity and EFFECTOR Therapeutics

0.0

Correlation Coefficient

Celularity  EFFECTOR Therapeutics

Pay attention - limited upside

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

Pair Corralation between Celularity and EFFECTOR Therapeutics

If you would invest  1.25  in Celularity on September 3, 2024 and sell it today you would earn a total of  0.75  from holding Celularity or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.22%
Values	Daily Returns

Celularity  vs.  EFFECTOR Therapeutics

Celularity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celularity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Celularity showed solid returns over the last few months and may actually be approaching a breakup point.

EFFECTOR Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EFFECTOR Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, EFFECTOR Therapeutics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Celularity and EFFECTOR Therapeutics

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

The idea behind Celularity and EFFECTOR 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.