Correlation Between Cingulate Warrants and Geron

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

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

Diversification Opportunities for Cingulate Warrants and Geron

0.51

Correlation Coefficient

Cingulate Warrants  Geron

Very weak diversification

The 3 months correlation between Cingulate and Geron is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and Geron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geron 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 Geron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geron has no effect on the direction of Cingulate Warrants i.e., Cingulate Warrants and Geron go up and down completely randomly.

Pair Corralation between Cingulate Warrants and Geron

Assuming the 90 days horizon Cingulate Warrants is expected to generate 9.45 times more return on investment than Geron. However, Cingulate Warrants is 9.45 times more volatile than Geron. It trades about 0.13 of its potential returns per unit of risk. Geron is currently generating about -0.14 per unit of risk. If you would invest  4.16  in Cingulate Warrants on September 5, 2024 and sell it today you would earn a total of  0.69  from holding Cingulate Warrants or generate 16.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Cingulate Warrants  vs.  Geron

Cingulate Warrants

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Geron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Geron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Geron is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cingulate Warrants and Geron

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

The idea behind Cingulate Warrants and Geron 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.