Correlation Between Alpha Teknova and Petros Pharmaceuticals

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

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

Diversification Opportunities for Alpha Teknova and Petros Pharmaceuticals

-0.34

Correlation Coefficient

Alpha Teknova  Petros Pharmaceuticals

Very good diversification

The 3 months correlation between Alpha and Petros is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Teknova and Petros Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petros Pharmaceuticals and Alpha Teknova 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 Alpha Teknova are associated (or correlated) with Petros Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petros Pharmaceuticals has no effect on the direction of Alpha Teknova i.e., Alpha Teknova and Petros Pharmaceuticals go up and down completely randomly.

Pair Corralation between Alpha Teknova and Petros Pharmaceuticals

Given the investment horizon of 90 days Alpha Teknova is expected to generate 0.94 times more return on investment than Petros Pharmaceuticals. However, Alpha Teknova is 1.07 times less risky than Petros Pharmaceuticals. It trades about 0.16 of its potential returns per unit of risk. Petros Pharmaceuticals is currently generating about 0.02 per unit of risk. If you would invest  456.00  in Alpha Teknova on September 12, 2024 and sell it today you would earn a total of  320.00  from holding Alpha Teknova or generate 70.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alpha Teknova  vs.  Petros Pharmaceuticals

Alpha Teknova

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Teknova are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Alpha Teknova displayed solid returns over the last few months and may actually be approaching a breakup point.

Petros Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Petros Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Petros Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alpha Teknova and Petros Pharmaceuticals

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

The idea behind Alpha Teknova and Petros Pharmaceuticals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.