Correlation Between Everspin Technologies and Living Cell

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

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

Diversification Opportunities for Everspin Technologies and Living Cell

-0.38

Correlation Coefficient

Everspin Technologies  Living Cell

Very good diversification

The 3 months correlation between Everspin and Living is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and Living Cell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Living Cell Technologies and Everspin Technologies 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 Everspin Technologies are associated (or correlated) with Living Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Living Cell Technologies has no effect on the direction of Everspin Technologies i.e., Everspin Technologies and Living Cell go up and down completely randomly.

Pair Corralation between Everspin Technologies and Living Cell

Given the investment horizon of 90 days Everspin Technologies is expected to generate 8.17 times less return on investment than Living Cell. But when comparing it to its historical volatility, Everspin Technologies is 1.55 times less risky than Living Cell. It trades about 0.04 of its potential returns per unit of risk. Living Cell Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.35  in Living Cell Technologies on September 22, 2024 and sell it today you would earn a total of  0.16  from holding Living Cell Technologies or generate 45.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Everspin Technologies  vs.  Living Cell Technologies

Everspin Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Everspin Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Living Cell Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Living Cell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Everspin Technologies and Living Cell

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

The idea behind Everspin Technologies and Living Cell Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.