Correlation Between Gamida Cell and Ardelyx

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

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

Diversification Opportunities for Gamida Cell and Ardelyx

0.2

Correlation Coefficient

Gamida Cell  Ardelyx

Modest diversification

The 3 months correlation between Gamida and Ardelyx is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gamida Cell and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx and Gamida Cell 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 Gamida Cell are associated (or correlated) with Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of Gamida Cell i.e., Gamida Cell and Ardelyx go up and down completely randomly.

Pair Corralation between Gamida Cell and Ardelyx

If you would invest  140.00  in Gamida Cell on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Gamida Cell or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Gamida Cell  vs.  Ardelyx

Gamida Cell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamida Cell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Gamida Cell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ardelyx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardelyx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Gamida Cell and Ardelyx

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

The idea behind Gamida Cell and Ardelyx 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.