Correlation Between Defence Therapeutics and Accustem Sciences

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

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

Diversification Opportunities for Defence Therapeutics and Accustem Sciences

0.17

Correlation Coefficient

Defence Therapeutics  Accustem Sciences

Average diversification

The 3 months correlation between Defence and Accustem is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Defence Therapeutics and Accustem Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accustem Sciences and Defence 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 Defence Therapeutics are associated (or correlated) with Accustem Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accustem Sciences has no effect on the direction of Defence Therapeutics i.e., Defence Therapeutics and Accustem Sciences go up and down completely randomly.

Pair Corralation between Defence Therapeutics and Accustem Sciences

Assuming the 90 days horizon Defence Therapeutics is expected to generate 0.24 times more return on investment than Accustem Sciences. However, Defence Therapeutics is 4.22 times less risky than Accustem Sciences. It trades about 0.03 of its potential returns per unit of risk. Accustem Sciences is currently generating about -0.02 per unit of risk. If you would invest  40.00  in Defence Therapeutics on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Defence Therapeutics or generate 2.5% return on investment over 90 days.

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

Defence Therapeutics  vs.  Accustem Sciences

Defence Therapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Defence Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Defence Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Accustem Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accustem Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Defence Therapeutics and Accustem Sciences

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

The idea behind Defence Therapeutics and Accustem Sciences 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.