Correlation Between Adagene and Living Cell

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

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

Diversification Opportunities for Adagene and Living Cell

0.05

Correlation Coefficient

Adagene  Living Cell

Significant diversification

The 3 months correlation between Adagene and Living is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Living Cell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Living Cell Technologies and Adagene 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 Adagene are associated (or correlated) with Living Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Living Cell Technologies has no effect on the direction of Adagene i.e., Adagene and Living Cell go up and down completely randomly.

Pair Corralation between Adagene and Living Cell

If you would invest  0.43  in Living Cell Technologies on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Living Cell Technologies or generate 0.0% return on investment over 90 days.

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

Adagene  vs.  Living Cell Technologies

Adagene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adagene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Living Cell Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Living Cell Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Living Cell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Adagene and Living Cell

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

The idea behind Adagene and Living Cell Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.