Correlation Between Applied Genetic and Bellus Health

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Can any of the company-specific risk be diversified away by investing in both Applied Genetic and Bellus Health 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 Applied Genetic and Bellus Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Genetic Tech and Bellus Health, you can compare the effects of market volatilities on Applied Genetic and Bellus Health 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 Applied Genetic with a short position of Bellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Genetic and Bellus Health.

Diversification Opportunities for Applied Genetic and Bellus Health

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Applied and Bellus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Genetic Tech and Bellus Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellus Health and Applied Genetic 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 Applied Genetic Tech are associated (or correlated) with Bellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellus Health has no effect on the direction of Applied Genetic i.e., Applied Genetic and Bellus Health go up and down completely randomly.

Pair Corralation between Applied Genetic and Bellus Health

Given the investment horizon of 90 days Applied Genetic Tech is expected to under-perform the Bellus Health. In addition to that, Applied Genetic is 1.53 times more volatile than Bellus Health. It trades about -0.4 of its total potential returns per unit of risk. Bellus Health is currently generating about -0.16 per unit of volatility. If you would invest  1,139  in Bellus Health on July 8, 2022 and sell it today you would lose (119.00)  from holding Bellus Health or give up 10.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Applied Genetic Tech  vs.  Bellus Health

 Performance (%) 
       Timeline  
Applied Genetic Tech 
Applied Performance
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Over the last 90 days Applied Genetic Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Applied Price Channel

Bellus Health 
Bellus Performance
0 of 100
Over the last 90 days Bellus Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Bellus Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Bellus Price Channel

Applied Genetic and Bellus Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Applied Genetic and Bellus Health

The main advantage of trading using opposite Applied Genetic and Bellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Genetic position performs unexpectedly, Bellus Health 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 Bellus Health will offset losses from the drop in Bellus Health's long position.
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The idea behind Applied Genetic Tech and Bellus Health 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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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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