Correlation Between Cellectar Biosciences and Pulmatrix

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

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

Diversification Opportunities for Cellectar Biosciences and Pulmatrix

-0.91

Correlation Coefficient

Cellectar Biosciences  Pulmatrix

Pay attention - limited upside

The 3 months correlation between Cellectar and Pulmatrix is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cellectar Biosciences and Pulmatrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmatrix and Cellectar Biosciences 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 Cellectar Biosciences are associated (or correlated) with Pulmatrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmatrix has no effect on the direction of Cellectar Biosciences i.e., Cellectar Biosciences and Pulmatrix go up and down completely randomly.

Pair Corralation between Cellectar Biosciences and Pulmatrix

Given the investment horizon of 90 days Cellectar Biosciences is expected to under-perform the Pulmatrix. But the stock apears to be less risky and, when comparing its historical volatility, Cellectar Biosciences is 4.59 times less risky than Pulmatrix. The stock trades about -0.19 of its potential returns per unit of risk. The Pulmatrix is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  205.00  in Pulmatrix on September 4, 2024 and sell it today you would earn a total of  429.00  from holding Pulmatrix or generate 209.27% return on investment over 90 days.

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

Cellectar Biosciences  vs.  Pulmatrix

Cellectar Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellectar Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pulmatrix

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmatrix are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Pulmatrix displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cellectar Biosciences and Pulmatrix

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

The idea behind Cellectar Biosciences and Pulmatrix 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.

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 the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.