Correlation Between Regen BioPharma and Alpha Cognition

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

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

Diversification Opportunities for Regen BioPharma and Alpha Cognition

0.38

Correlation Coefficient

Regen BioPharma  Alpha Cognition

Weak diversification

The 3 months correlation between Regen and Alpha is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Regen BioPharma and Alpha Cognition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Cognition and Regen BioPharma 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 Regen BioPharma 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 Regen BioPharma i.e., Regen BioPharma and Alpha Cognition go up and down completely randomly.

Pair Corralation between Regen BioPharma and Alpha Cognition

Given the investment horizon of 90 days Regen BioPharma is expected to generate 3.99 times more return on investment than Alpha Cognition. However, Regen BioPharma is 3.99 times more volatile than Alpha Cognition. It trades about 0.11 of its potential returns per unit of risk. Alpha Cognition is currently generating about -0.03 per unit of risk. If you would invest  15.00  in Regen BioPharma on September 4, 2024 and sell it today you would lose (9.49) from holding Regen BioPharma or give up 63.27% of portfolio value over 90 days.

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

Regen BioPharma  vs.  Alpha Cognition

Regen BioPharma

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental drivers, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Alpha Cognition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Cognition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental 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 Regen BioPharma and Alpha Cognition

The main advantage of trading using opposite Regen BioPharma and Alpha Cognition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regen BioPharma 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 Regen BioPharma 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.