Correlation Between Geron and Alpha Cognition

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

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

Diversification Opportunities for Geron and Alpha Cognition

0.39

Correlation Coefficient

Geron  Alpha Cognition

Weak diversification

The 3 months correlation between Geron and Alpha is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Alpha Cognition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Cognition and Geron 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 Geron are associated (or correlated) with Alpha Cognition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Cognition has no effect on the direction of Geron i.e., Geron and Alpha Cognition go up and down completely randomly.

Pair Corralation between Geron and Alpha Cognition

Given the investment horizon of 90 days Geron is expected to under-perform the Alpha Cognition. But the stock apears to be less risky and, when comparing its historical volatility, Geron is 45.46 times less risky than Alpha Cognition. The stock trades about -0.02 of its potential returns per unit of risk. The Alpha Cognition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1.64  in Alpha Cognition on August 31, 2024 and sell it today you would earn a total of  665.36  from holding Alpha Cognition or generate 40570.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Geron  vs.  Alpha Cognition

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 current stock price disarray, may contribute to short-term losses for the investors.

Alpha Cognition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Cognition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Alpha Cognition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Geron and Alpha Cognition

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

The idea behind Geron and Alpha Cognition 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.