Correlation Between Cyteir Therapeutics and Adagene

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

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

Diversification Opportunities for Cyteir Therapeutics and Adagene

-0.59

Correlation Coefficient

Cyteir Therapeutics  Adagene

Excellent diversification

The 3 months correlation between Cyteir and Adagene is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cyteir Therapeutics and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Cyteir 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 Cyteir Therapeutics are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Cyteir Therapeutics i.e., Cyteir Therapeutics and Adagene go up and down completely randomly.

Pair Corralation between Cyteir Therapeutics and Adagene

If you would invest  276.00  in Cyteir Therapeutics on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Cyteir Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Cyteir Therapeutics  vs.  Adagene

Cyteir Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyteir Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cyteir Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Adagene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adagene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Cyteir Therapeutics and Adagene

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

The idea behind Cyteir Therapeutics and Adagene 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.