Correlation Between Relief Therapeutics and Cicor Technologies

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

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

Diversification Opportunities for Relief Therapeutics and Cicor Technologies

0.29

Correlation Coefficient

Relief Therapeutics  Cicor Technologies

Modest diversification

The 3 months correlation between Relief and Cicor is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Relief Therapeutics Holding and Cicor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicor Technologies and Relief Therapeutics 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 Relief Therapeutics Holding are associated (or correlated) with Cicor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicor Technologies has no effect on the direction of Relief Therapeutics i.e., Relief Therapeutics and Cicor Technologies go up and down completely randomly.

Pair Corralation between Relief Therapeutics and Cicor Technologies

Assuming the 90 days trading horizon Relief Therapeutics Holding is expected to generate 7.62 times more return on investment than Cicor Technologies. However, Relief Therapeutics is 7.62 times more volatile than Cicor Technologies. It trades about 0.14 of its potential returns per unit of risk. Cicor Technologies is currently generating about 0.11 per unit of risk. If you would invest  212.00  in Relief Therapeutics Holding on September 14, 2024 and sell it today you would earn a total of  186.00  from holding Relief Therapeutics Holding or generate 87.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Relief Therapeutics Holding  vs.  Cicor Technologies

Relief Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Relief Therapeutics Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Relief Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Cicor Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cicor Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cicor Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Relief Therapeutics and Cicor Technologies

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

The idea behind Relief Therapeutics Holding and Cicor 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.