Correlation Between Gelesis Holdings and Protagenic Therapeutics

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

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

Diversification Opportunities for Gelesis Holdings and Protagenic Therapeutics

0.0

Correlation Coefficient

Gelesis Holdings  Protagenic Therapeutics

Pay attention - limited upside

The 3 months correlation between Gelesis and Protagenic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gelesis Holdings and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic Therapeutics and Gelesis Holdings 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 Gelesis Holdings are associated (or correlated) with Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Gelesis Holdings i.e., Gelesis Holdings and Protagenic Therapeutics go up and down completely randomly.

Pair Corralation between Gelesis Holdings and Protagenic Therapeutics

If you would invest  60.00  in Protagenic Therapeutics on September 4, 2024 and sell it today you would lose (13.00) from holding Protagenic Therapeutics or give up 21.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gelesis Holdings  vs.  Protagenic Therapeutics

Gelesis Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gelesis Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gelesis Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Protagenic Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Protagenic Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Protagenic Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gelesis Holdings and Protagenic Therapeutics

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

The idea behind Gelesis Holdings and Protagenic Therapeutics 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.