Correlation Between Multicell Techs and Living Cell

Can any of the company-specific risk be diversified away by investing in both Multicell Techs and Living Cell 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 Multicell Techs and Living Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Multicell Techs and Living Cell Technologies, you can compare the effects of market volatilities on Multicell Techs and Living Cell 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 Multicell Techs with a short position of Living Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multicell Techs and Living Cell.

Diversification Opportunities for Multicell Techs and Living Cell

-0.54

Correlation Coefficient

Multicell Techs  Living Cell

Excellent diversification

The 3 months correlation between Multicell and Living is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Multicell Techs and Living Cell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Living Cell Technologies and Multicell Techs 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 Multicell Techs are associated (or correlated) with Living Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Living Cell Technologies has no effect on the direction of Multicell Techs i.e., Multicell Techs and Living Cell go up and down completely randomly.

Pair Corralation between Multicell Techs and Living Cell

Given the investment horizon of 90 days Multicell Techs is expected to generate 9.86 times more return on investment than Living Cell. However, Multicell Techs is 9.86 times more volatile than Living Cell Technologies. It trades about 0.11 of its potential returns per unit of risk. Living Cell Technologies is currently generating about 0.13 per unit of risk. If you would invest  0.01  in Multicell Techs on February 20, 2024 and sell it today you would lose (0.01) from holding Multicell Techs or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Multicell Techs  vs.  Living Cell Technologies

Multicell Techs

Risk-Adjusted Performance

8 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multicell Techs are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Multicell Techs unveiled solid returns over the last few months and may actually be approaching a breakup point.

Living Cell Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Living Cell Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Living Cell reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multicell Techs and Living Cell

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

The idea behind Multicell Techs and Living Cell Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.