Correlation Between Technology One and Chimeric Therapeutics

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

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

Diversification Opportunities for Technology One and Chimeric Therapeutics

-0.4

Correlation Coefficient

Technology One  Chimeric Therapeutics

Very good diversification

The 3 months correlation between Technology and Chimeric is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Technology One and Chimeric Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimeric Therapeutics and Technology One 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 Technology One are associated (or correlated) with Chimeric Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimeric Therapeutics has no effect on the direction of Technology One i.e., Technology One and Chimeric Therapeutics go up and down completely randomly.

Pair Corralation between Technology One and Chimeric Therapeutics

Assuming the 90 days trading horizon Technology One is expected to generate 1.11 times less return on investment than Chimeric Therapeutics. But when comparing it to its historical volatility, Technology One is 6.53 times less risky than Chimeric Therapeutics. It trades about 0.29 of its potential returns per unit of risk. Chimeric Therapeutics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Chimeric Therapeutics on April 24, 2025 and sell it today you would lose (0.05) from holding Chimeric Therapeutics or give up 10.0% of portfolio value over 90 days.

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

Technology One  vs.  Chimeric Therapeutics

Technology One

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology One are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Technology One unveiled solid returns over the last few months and may actually be approaching a breakup point.

Chimeric Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chimeric Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Chimeric Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Technology One and Chimeric Therapeutics

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

The idea behind Technology One and Chimeric Therapeutics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.