Correlation Between Compugen and Windtree Therapeutics

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

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

Diversification Opportunities for Compugen and Windtree Therapeutics

-0.37

Correlation Coefficient

Compugen  Windtree Therapeutics

Very good diversification

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

Pair Corralation between Compugen and Windtree Therapeutics

Given the investment horizon of 90 days Compugen is expected to generate 0.32 times more return on investment than Windtree Therapeutics. However, Compugen is 3.09 times less risky than Windtree Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Windtree Therapeutics is currently generating about 0.01 per unit of risk. If you would invest  126.00  in Compugen on May 9, 2025 and sell it today you would earn a total of  18.00  from holding Compugen or generate 14.29% return on investment over 90 days.

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

Compugen  vs.  Windtree Therapeutics

Compugen

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Compugen are ranked lower than 5 (%) 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.

Windtree Therapeutics

Risk-Adjusted Performance

Weakest

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

Pair Trading with Compugen and Windtree Therapeutics

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

The idea behind Compugen and Windtree 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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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.