Correlation Between CD Projekt and Abeona Therapeutics

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

Diversification Opportunities for CD Projekt and Abeona Therapeutics

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between OTGLY and Abeona is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CD Projekt SA and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and CD Projekt 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 CD Projekt SA are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of CD Projekt i.e., CD Projekt and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between CD Projekt and Abeona Therapeutics

Assuming the 90 days horizon CD Projekt SA is expected to generate 0.57 times more return on investment than Abeona Therapeutics. However, CD Projekt SA is 1.75 times less risky than Abeona Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Abeona Therapeutics is currently generating about -0.04 per unit of risk. If you would invest  1,096  in CD Projekt SA on August 29, 2022 and sell it today you would lose (328.00)  from holding CD Projekt SA or give up 29.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CD Projekt SA  vs.  Abeona Therapeutics

 Performance (%) 
       Timeline  
CD Projekt SA 
OTGLY Performance
16 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in CD Projekt SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, CD Projekt showed solid returns over the last few months and may actually be approaching a breakup point.

OTGLY Price Channel

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

Abeona Price Channel

CD Projekt and Abeona Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CD Projekt and Abeona Therapeutics

The main advantage of trading using opposite CD Projekt and Abeona Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CD Projekt position performs unexpectedly, Abeona 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 Abeona Therapeutics will offset losses from the drop in Abeona Therapeutics' long position.
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The idea behind CD Projekt SA and Abeona 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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