Correlation Between Enlivex Therapeutics and Supercom

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

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

Diversification Opportunities for Enlivex Therapeutics and Supercom

-0.62

Correlation Coefficient

Enlivex Therapeutics  Supercom

Excellent diversification

The 3 months correlation between Enlivex and Supercom is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Enlivex Therapeutics and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and Enlivex Therapeutics 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 Enlivex Therapeutics are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Enlivex Therapeutics i.e., Enlivex Therapeutics and Supercom go up and down completely randomly.

Pair Corralation between Enlivex Therapeutics and Supercom

Given the investment horizon of 90 days Enlivex Therapeutics is expected to under-perform the Supercom. But the stock apears to be less risky and, when comparing its historical volatility, Enlivex Therapeutics is 1.17 times less risky than Supercom. The stock trades about -0.21 of its potential returns per unit of risk. The Supercom is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Supercom on February 8, 2024 and sell it today you would lose (2.30) from holding Supercom or give up 10.45% of portfolio value over 90 days.

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

Enlivex Therapeutics  vs.  Supercom

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics 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 essential indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Supercom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enlivex Therapeutics and Supercom

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

The idea behind Enlivex Therapeutics and Supercom 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.