Correlation Between Compugen and Abcellera Biologics

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

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

Diversification Opportunities for Compugen and Abcellera Biologics

0.4

Correlation Coefficient

Compugen  Abcellera Biologics

Very weak diversification

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

Pair Corralation between Compugen and Abcellera Biologics

Given the investment horizon of 90 days Compugen is expected to under-perform the Abcellera Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Compugen is 3.08 times less risky than Abcellera Biologics. The stock trades about -0.34 of its potential returns per unit of risk. The Abcellera Biologics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  422.00  in Abcellera Biologics on May 10, 2025 and sell it today you would lose (10.00) from holding Abcellera Biologics or give up 2.37% of portfolio value over 90 days.

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

Compugen  vs.  Abcellera Biologics

Compugen

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Compugen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Compugen displayed solid returns over the last few months and may actually be approaching a breakup point.

Abcellera Biologics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Abcellera Biologics are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Abcellera Biologics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compugen and Abcellera Biologics

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

The idea behind Compugen and Abcellera Biologics 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.