Correlation Between Brickell Biotech and ChemoCentryx

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

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

Diversification Opportunities for Brickell Biotech and ChemoCentryx

-0.55

Correlation Coefficient

Brickell Biotech  ChemoCentryx

Excellent diversification

The 3 months correlation between Brickell and ChemoCentryx is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brickell Biotech and ChemoCentryx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChemoCentryx and Brickell Biotech 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 Brickell Biotech are associated (or correlated) with ChemoCentryx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChemoCentryx has no effect on the direction of Brickell Biotech i.e., Brickell Biotech and ChemoCentryx go up and down completely randomly.

Pair Corralation between Brickell Biotech and ChemoCentryx

If you would invest  87.00  in Brickell Biotech on January 24, 2024 and sell it today you would earn a total of  3.00  from holding Brickell Biotech or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Brickell Biotech  vs.  ChemoCentryx

Brickell Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brickell Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

ChemoCentryx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChemoCentryx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ChemoCentryx is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Brickell Biotech and ChemoCentryx

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

The idea behind Brickell Biotech and ChemoCentryx 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.