Correlation Between Palatin Technologies and Atreca

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

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

Diversification Opportunities for Palatin Technologies and Atreca

0.63

Correlation Coefficient

Palatin Technologies Atreca

Poor diversification

The 3 months correlation between Palatin and Atreca is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Palatin Technologies and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc and Palatin Technologies 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 Palatin Technologies are associated (or correlated) with Atreca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atreca Inc has no effect on the direction of Palatin Technologies i.e., Palatin Technologies and Atreca go up and down completely randomly.

Pair Corralation between Palatin Technologies and Atreca

Considering the 90-day investment horizon Palatin Technologies is expected to generate 1.48 times less return on investment than Atreca. But when comparing it to its historical volatility, Palatin Technologies is 1.2 times less risky than Atreca. It trades about 0.11 of its potential returns per unit of risk. Atreca Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  78.00  in Atreca Inc on December 26, 2022 and sell it today you would earn a total of  45.00  from holding Atreca Inc or generate 57.69% return on investment over 90 days.

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

Palatin Technologies  vs.  Atreca Inc

Palatin Technologies

Palatin Performance

8 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Palatin Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Palatin Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Atreca Inc

Atreca Performance

10 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Atreca Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Atreca disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palatin Technologies and Atreca

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

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The idea behind Palatin Technologies and Atreca 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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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.