Correlation Between HCW Biologics and CEL SCI

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

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

Diversification Opportunities for HCW Biologics and CEL SCI

-0.07

Correlation Coefficient

HCW Biologics  CEL SCI

Good diversification

The 3 months correlation between HCW and CEL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding HCW Biologics and CEL SCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEL SCI Corp and HCW Biologics 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 HCW Biologics are associated (or correlated) with CEL SCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEL SCI Corp has no effect on the direction of HCW Biologics i.e., HCW Biologics and CEL SCI go up and down completely randomly.

Pair Corralation between HCW Biologics and CEL SCI

Given the investment horizon of 90 days HCW Biologics is expected to generate 1.02 times more return on investment than CEL SCI. However, HCW Biologics is 1.02 times more volatile than CEL SCI Corp. It trades about 0.0 of its potential returns per unit of risk. CEL SCI Corp is currently generating about -0.14 per unit of risk. If you would invest  118.00  in HCW Biologics on February 16, 2024 and sell it today you would lose (8.00) from holding HCW Biologics or give up 6.78% of portfolio value over 90 days.

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

HCW Biologics  vs.  CEL SCI Corp

HCW Biologics

Risk-Adjusted Performance

0 of 100

Weak

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

CEL SCI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEL SCI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with HCW Biologics and CEL SCI

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

The idea behind HCW Biologics and CEL SCI Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.