Correlation Between Equillium and Histogen
Can any of the company-specific risk be diversified away by investing in both Equillium and Histogen 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 Equillium and Histogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Histogen, you can compare the effects of market volatilities on Equillium and Histogen 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 Equillium with a short position of Histogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Histogen.
Diversification Opportunities for Equillium and Histogen
Poor diversification
The 3 months correlation between Equillium and Histogen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen and Equillium 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 Equillium are associated (or correlated) with Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Equillium i.e., Equillium and Histogen go up and down completely randomly.
Pair Corralation between Equillium and Histogen
Allowing for the 90-day total investment horizon Equillium is expected to generate 0.54 times more return on investment than Histogen. However, Equillium is 1.85 times less risky than Histogen. It trades about -0.02 of its potential returns per unit of risk. Histogen is currently generating about -0.06 per unit of risk. If you would invest 82.00 in Equillium on September 24, 2024 and sell it today you would lose (22.20) from holding Equillium or give up 27.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Equillium vs. Histogen
Performance |
Timeline |
Equillium |
Histogen |
Equillium and Histogen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Equillium and Histogen
The main advantage of trading using opposite Equillium and Histogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, Histogen 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 Histogen will offset losses from the drop in Histogen's long position.Equillium vs. Fate Therapeutics | Equillium vs. Sana Biotechnology | Equillium vs. Caribou Biosciences | Equillium vs. Arcus Biosciences |
Histogen vs. Fate Therapeutics | Histogen vs. Sana Biotechnology | Histogen vs. Caribou Biosciences | Histogen vs. Arcus Biosciences |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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