Correlation Between Element Fleet and Cipher Pharmaceuticals

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

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

Diversification Opportunities for Element Fleet and Cipher Pharmaceuticals

0.11

Correlation Coefficient

Element Fleet  Cipher Pharmaceuticals

Average diversification

The 3 months correlation between Element and Cipher is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and Cipher Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Pharmaceuticals and Element Fleet 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 Element Fleet Management are associated (or correlated) with Cipher Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Pharmaceuticals has no effect on the direction of Element Fleet i.e., Element Fleet and Cipher Pharmaceuticals go up and down completely randomly.

Pair Corralation between Element Fleet and Cipher Pharmaceuticals

Assuming the 90 days trading horizon Element Fleet Management is expected to generate 0.4 times more return on investment than Cipher Pharmaceuticals. However, Element Fleet Management is 2.49 times less risky than Cipher Pharmaceuticals. It trades about 0.3 of its potential returns per unit of risk. Cipher Pharmaceuticals is currently generating about 0.08 per unit of risk. If you would invest  2,973  in Element Fleet Management on April 20, 2025 and sell it today you would earn a total of  607.00  from holding Element Fleet Management or generate 20.42% return on investment over 90 days.

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

Element Fleet Management  vs.  Cipher Pharmaceuticals

Element Fleet Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Element Fleet displayed solid returns over the last few months and may actually be approaching a breakup point.

Cipher Pharmaceuticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical indicators, Cipher Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Element Fleet and Cipher Pharmaceuticals

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

The idea behind Element Fleet Management and Cipher Pharmaceuticals 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.