Correlation Between Vericel Corp and Phio Pharmaceuticals

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

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

Diversification Opportunities for Vericel Corp and Phio Pharmaceuticals

-0.51

Correlation Coefficient

Vericel Corp  Phio Pharmaceuticals

Excellent diversification

The 3 months correlation between Vericel and Phio is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Phio Pharmaceuticals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phio Pharmaceuticals Corp and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Phio Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phio Pharmaceuticals Corp has no effect on the direction of Vericel Corp i.e., Vericel Corp and Phio Pharmaceuticals go up and down completely randomly.

Pair Corralation between Vericel Corp and Phio Pharmaceuticals

Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 0.44 times more return on investment than Phio Pharmaceuticals. However, Vericel Corp Ord is 2.26 times less risky than Phio Pharmaceuticals. It trades about 0.16 of its potential returns per unit of risk. Phio Pharmaceuticals Corp is currently generating about 0.02 per unit of risk. If you would invest  4,427  in Vericel Corp Ord on September 12, 2024 and sell it today you would earn a total of  1,329  from holding Vericel Corp Ord or generate 30.02% return on investment over 90 days.

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

Vericel Corp Ord  vs.  Phio Pharmaceuticals Corp

Vericel Corp Ord

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Vericel Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Phio Pharmaceuticals Corp

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Vericel Corp and Phio Pharmaceuticals

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

The idea behind Vericel Corp Ord and Phio Pharmaceuticals Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.