Correlation Between Cumberland Pharmaceuticals and Calyxt

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

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

Diversification Opportunities for Cumberland Pharmaceuticals and Calyxt

-0.32

Correlation Coefficient

Cumberland Pharmaceuticals  Calyxt

Very good diversification

The 3 months correlation between Cumberland and Calyxt is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and Calyxt Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calyxt Inc and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals are associated (or correlated) with Calyxt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calyxt Inc has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and Calyxt go up and down completely randomly.

Pair Corralation between Cumberland Pharmaceuticals and Calyxt

If you would invest  167.00  in Cumberland Pharmaceuticals on January 25, 2024 and sell it today you would lose (6.00) from holding Cumberland Pharmaceuticals or give up 3.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.97%
Values	Daily Returns

Cumberland Pharmaceuticals  vs.  Calyxt Inc

Cumberland Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Calyxt Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calyxt Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Calyxt is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cumberland Pharmaceuticals and Calyxt

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

The idea behind Cumberland Pharmaceuticals and Calyxt Inc 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.