Correlation Between Cingulate Warrants and Dynavax Technologies

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

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

Diversification Opportunities for Cingulate Warrants and Dynavax Technologies

-0.71

Correlation Coefficient

Cingulate Warrants  Dynavax Technologies

Pay attention - limited upside

The 3 months correlation between Cingulate and Dynavax is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and Dynavax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynavax Technologies and Cingulate Warrants 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 Cingulate Warrants are associated (or correlated) with Dynavax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynavax Technologies has no effect on the direction of Cingulate Warrants i.e., Cingulate Warrants and Dynavax Technologies go up and down completely randomly.

Pair Corralation between Cingulate Warrants and Dynavax Technologies

Assuming the 90 days horizon Cingulate Warrants is expected to generate 1.56 times less return on investment than Dynavax Technologies. In addition to that, Cingulate Warrants is 6.55 times more volatile than Dynavax Technologies. It trades about 0.01 of its total potential returns per unit of risk. Dynavax Technologies is currently generating about 0.12 per unit of volatility. If you would invest  1,097  in Dynavax Technologies on September 12, 2024 and sell it today you would earn a total of  188.00  from holding Dynavax Technologies or generate 17.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Cingulate Warrants  vs.  Dynavax Technologies

Cingulate Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cingulate Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak technical and fundamental indicators, Cingulate Warrants may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dynavax Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynavax Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Dynavax Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cingulate Warrants and Dynavax Technologies

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

The idea behind Cingulate Warrants and Dynavax Technologies 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.