Correlation Between Celgene and Stem
Can any of the company-specific risk be diversified away by investing in both Celgene and Stem 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 Celgene and Stem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celgene and Stem Inc, you can compare the effects of market volatilities on Celgene and Stem 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 Celgene with a short position of Stem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celgene and Stem.
Diversification Opportunities for Celgene and Stem
Pay attention - limited upside
The 3 months correlation between Celgene and Stem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Celgene and Stem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stem Inc and Celgene 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 Celgene are associated (or correlated) with Stem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stem Inc has no effect on the direction of Celgene i.e., Celgene and Stem go up and down completely randomly.
Pair Corralation between Celgene and Stem
If you would invest (100.00) in Celgene on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Celgene or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Celgene vs. Stem Inc
Performance |
| Timeline |
| Celgene |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Stem Inc |
Celgene and Stem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celgene and Stem
The main advantage of trading using opposite Celgene and Stem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celgene position performs unexpectedly, Stem 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 Stem will offset losses from the drop in Stem's long position.| Celgene vs. Hasbro Inc | Celgene vs. Orbit Garant Drilling | Celgene vs. Nabors Industries | Celgene vs. Academy Sports OutdoorsInc |
| Stem vs. Palo Alto Networks | Stem vs. Crowdstrike Holdings | Stem vs. Cloudflare | Stem vs. Palantir TechnologiesInc |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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