Correlation Between Cyclacel Pharmaceuti and Veeco Instrument

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

Diversification Opportunities for Cyclacel Pharmaceuti and Veeco Instrument

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cyclacel and Veeco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cyclacel Pharmaceuti and Veeco Instrument in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veeco Instrument and Cyclacel Pharmaceuti 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 Cyclacel Pharmaceuti are associated (or correlated) with Veeco Instrument. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veeco Instrument has no effect on the direction of Cyclacel Pharmaceuti i.e., Cyclacel Pharmaceuti and Veeco Instrument go up and down completely randomly.

Pair Corralation between Cyclacel Pharmaceuti and Veeco Instrument

Given the investment horizon of 90 days Cyclacel Pharmaceuti is expected to generate 2.87 times more return on investment than Veeco Instrument. However, Cyclacel Pharmaceuti is 2.87 times more volatile than Veeco Instrument. It trades about 0.12 of its potential returns per unit of risk. Veeco Instrument is currently generating about 0.3 per unit of risk. If you would invest  115.00  in Cyclacel Pharmaceuti on May 12, 2022 and sell it today you would earn a total of  16.00  from holding Cyclacel Pharmaceuti or generate 13.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Cyclacel Pharmaceuti  vs.  Veeco Instrument

 Performance (%) 
       Timeline  
Cyclacel Pharmaceuti 
Cyclacel Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cyclacel Pharmaceuti are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Cyclacel Pharmaceuti may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Cyclacel Price Channel

Veeco Instrument 
Veeco Performance
0 of 100
Over the last 90 days Veeco Instrument has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Veeco Instrument is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Veeco Price Channel

Cyclacel Pharmaceuti and Veeco Instrument Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cyclacel Pharmaceuti and Veeco Instrument

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

Cyclacel Pharmaceuti

Pair trading matchups for Cyclacel Pharmaceuti

The idea behind Cyclacel Pharmaceuti and Veeco Instrument 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.

Veeco Instrument

Pair trading matchups for Veeco Instrument

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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