Correlation Between Cleveland BioLabs and Equillium

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

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

Diversification Opportunities for Cleveland BioLabs and Equillium

0.0

Correlation Coefficient

Cleveland BioLabs  Equillium

Pay attention - limited upside

The 3 months correlation between Cleveland and Equillium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland BioLabs and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Cleveland BioLabs 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 Cleveland BioLabs are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Cleveland BioLabs i.e., Cleveland BioLabs and Equillium go up and down completely randomly.

Pair Corralation between Cleveland BioLabs and Equillium

If you would invest (100.00) in Cleveland BioLabs on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Cleveland BioLabs 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

Cleveland BioLabs  vs.  Equillium

Cleveland BioLabs

Risk-Adjusted Performance

0 of 100

Very Weak

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

Equillium

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equillium are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Equillium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cleveland BioLabs and Equillium

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

The idea behind Cleveland BioLabs and Equillium 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.