Correlation Between Checkpoint Therapeutics and AstraZeneca PLC

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

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

Diversification Opportunities for Checkpoint Therapeutics and AstraZeneca PLC

-0.34

Correlation Coefficient

Checkpoint Therapeutics  AstraZeneca PLC

Very good diversification

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

Pair Corralation between Checkpoint Therapeutics and AstraZeneca PLC

Given the investment horizon of 90 days Checkpoint Therapeutics is expected to generate 1.2 times less return on investment than AstraZeneca PLC. In addition to that, Checkpoint Therapeutics is 2.92 times more volatile than AstraZeneca PLC ADR. It trades about 0.08 of its total potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about 0.28 per unit of volatility. If you would invest  6,573  in AstraZeneca PLC ADR on March 20, 2024 and sell it today you would earn a total of  1,358  from holding AstraZeneca PLC ADR or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Checkpoint Therapeutics  vs.  AstraZeneca PLC ADR

Checkpoint Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Checkpoint Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Checkpoint Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

AstraZeneca PLC ADR

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AstraZeneca PLC ADR are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AstraZeneca PLC displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Checkpoint Therapeutics and AstraZeneca PLC

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

The idea behind Checkpoint Therapeutics and AstraZeneca PLC ADR 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.