Correlation Between Vericel Corp and Talphera

Can any of the company-specific risk be diversified away by investing in both Vericel Corp and Talphera 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 Talphera 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 Talphera, you can compare the effects of market volatilities on Vericel Corp and Talphera 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 Talphera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Talphera.

Diversification Opportunities for Vericel Corp and Talphera

-0.63

Correlation Coefficient

Vericel Corp  Talphera

Excellent diversification

The 3 months correlation between Vericel and Talphera is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Talphera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talphera 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 Talphera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talphera has no effect on the direction of Vericel Corp i.e., Vericel Corp and Talphera go up and down completely randomly.

Pair Corralation between Vericel Corp and Talphera

Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 0.37 times more return on investment than Talphera. However, Vericel Corp Ord is 2.68 times less risky than Talphera. It trades about 0.0 of its potential returns per unit of risk. Talphera is currently generating about -0.07 per unit of risk. If you would invest  5,671  in Vericel Corp Ord on September 22, 2024 and sell it today you would lose (21.00) from holding Vericel Corp Ord or give up 0.37% of portfolio value over 90 days.

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

Vericel Corp Ord  vs.  Talphera

Vericel Corp Ord

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 10 (%) 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.

Talphera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Talphera has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Vericel Corp and Talphera

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

The idea behind Vericel Corp Ord and Talphera 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 Commodity Directory module to find actively traded commodities issued by global exchanges.