Correlation Between Silver Spike and Intracellular

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

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

Diversification Opportunities for Silver Spike and Intracellular

0.08

Correlation Coefficient

Silver Spike  Intracellular

Significant diversification

The 3 months correlation between Silver and Intracellular is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Silver Spike Investment and Intracellular Th in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intracellular Th and Silver Spike 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 Silver Spike Investment are associated (or correlated) with Intracellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intracellular Th has no effect on the direction of Silver Spike i.e., Silver Spike and Intracellular go up and down completely randomly.

Pair Corralation between Silver Spike and Intracellular

Given the investment horizon of 90 days Silver Spike Investment is expected to generate 0.34 times more return on investment than Intracellular. However, Silver Spike Investment is 2.9 times less risky than Intracellular. It trades about 0.23 of its potential returns per unit of risk. Intracellular Th is currently generating about 0.04 per unit of risk. If you would invest  975.00  in Silver Spike Investment on February 4, 2024 and sell it today you would earn a total of  142.00  from holding Silver Spike Investment or generate 14.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

Silver Spike Investment  vs.  Intracellular Th

Silver Spike Investment

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Spike Investment are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Silver Spike exhibited solid returns over the last few months and may actually be approaching a breakup point.

Intracellular Th

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intracellular Th are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Intracellular is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Silver Spike and Intracellular

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

The idea behind Silver Spike Investment and Intracellular Th 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.