Correlation Between Vericel Corp and Collplant Biotechnologies

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

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

Diversification Opportunities for Vericel Corp and Collplant Biotechnologies

0.34

Correlation Coefficient

Vericel Corp  Collplant Biotechnologies

Weak diversification

The 3 months correlation between Vericel and Collplant is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Collplant Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collplant Biotechnologies and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Collplant Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collplant Biotechnologies has no effect on the direction of Vericel Corp i.e., Vericel Corp and Collplant Biotechnologies go up and down completely randomly.

Pair Corralation between Vericel Corp and Collplant Biotechnologies

Given the investment horizon of 90 days Vericel Corp is expected to generate 1.32 times less return on investment than Collplant Biotechnologies. But when comparing it to its historical volatility, Vericel Corp Ord is 1.49 times less risky than Collplant Biotechnologies. It trades about 0.09 of its potential returns per unit of risk. Collplant Biotechnologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  589.00  in Collplant Biotechnologies on February 26, 2024 and sell it today you would earn a total of  33.00  from holding Collplant Biotechnologies or generate 5.6% return on investment over 90 days.

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

Vericel Corp Ord  vs.  Collplant Biotechnologies

Vericel Corp Ord

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Vericel Corp is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Collplant Biotechnologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Collplant Biotechnologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Collplant Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vericel Corp and Collplant Biotechnologies

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

The idea behind Vericel Corp Ord and Collplant Biotechnologies 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .