Correlation Between Celldex Therapeutics and Sitka Gold

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

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

Diversification Opportunities for Celldex Therapeutics and Sitka Gold

0.18

Correlation Coefficient

Celldex Therapeutics  Sitka Gold

Average diversification

The 3 months correlation between Celldex and Sitka is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Celldex Therapeutics and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp and Celldex Therapeutics 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 Celldex Therapeutics are associated (or correlated) with Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Celldex Therapeutics i.e., Celldex Therapeutics and Sitka Gold go up and down completely randomly.

Pair Corralation between Celldex Therapeutics and Sitka Gold

Given the investment horizon of 90 days Celldex Therapeutics is expected to under-perform the Sitka Gold. But the stock apears to be less risky and, when comparing its historical volatility, Celldex Therapeutics is 2.05 times less risky than Sitka Gold. The stock trades about -0.13 of its potential returns per unit of risk. The Sitka Gold Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  27.00  in Sitka Gold Corp on September 29, 2024 and sell it today you would lose (3.00) from holding Sitka Gold Corp or give up 11.11% of portfolio value over 90 days.

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

Celldex Therapeutics  vs.  Sitka Gold Corp

Celldex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celldex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sitka Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sitka Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Sitka Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Celldex Therapeutics and Sitka Gold

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

The idea behind Celldex Therapeutics and Sitka Gold Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.