Correlation Between Celcuity and Chembio Diagnostics

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

Diversification Opportunities for Celcuity and Chembio Diagnostics

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Celcuity and Chembio Diagnostics

If you would invest  925.00  in Celcuity on July 7, 2022 and sell it today you would earn a total of  78.00  from holding Celcuity or generate 8.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Celcuity  vs.  Chembio Diagnostics

 Performance (%) 
       Timeline  
Celcuity 
Celcuity Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Celcuity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Celcuity may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Celcuity Price Channel

Chembio Diagnostics 
Chembio Performance
0 of 100
Over the last 90 days Chembio Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Chembio Diagnostics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Celcuity and Chembio Diagnostics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Celcuity and Chembio Diagnostics

The main advantage of trading using opposite Celcuity and Chembio Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celcuity position performs unexpectedly, Chembio Diagnostics 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 Chembio Diagnostics will offset losses from the drop in Chembio Diagnostics' long position.
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The idea behind Celcuity and Chembio Diagnostics 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.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Chembio Diagnostics as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Chembio Diagnostics' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Chembio Diagnostics' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Chembio Diagnostics.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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