Correlation Between Cytogen and AnterogenCoLtd

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

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

Diversification Opportunities for Cytogen and AnterogenCoLtd

-0.49

Correlation Coefficient

Cytogen  AnterogenCoLtd

Very good diversification

The 3 months correlation between Cytogen and AnterogenCoLtd is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cytogen and AnterogenCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AnterogenCoLtd and Cytogen 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 Cytogen are associated (or correlated) with AnterogenCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AnterogenCoLtd has no effect on the direction of Cytogen i.e., Cytogen and AnterogenCoLtd go up and down completely randomly.

Pair Corralation between Cytogen and AnterogenCoLtd

Assuming the 90 days trading horizon Cytogen is expected to under-perform the AnterogenCoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Cytogen is 1.39 times less risky than AnterogenCoLtd. The stock trades about -0.21 of its potential returns per unit of risk. The AnterogenCoLtd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,413,000  in AnterogenCoLtd on March 14, 2024 and sell it today you would earn a total of  120,000  from holding AnterogenCoLtd or generate 8.49% return on investment over 90 days.

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

Cytogen  vs.  AnterogenCoLtd

Cytogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

AnterogenCoLtd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AnterogenCoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AnterogenCoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cytogen and AnterogenCoLtd

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

The idea behind Cytogen and AnterogenCoLtd 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.