Correlation Between Climb Bio and Sol Gel

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

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

Diversification Opportunities for Climb Bio and Sol Gel

0.89

Correlation Coefficient

Climb Bio  Sol Gel

Very poor diversification

The 3 months correlation between Climb and Sol is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Climb Bio and Sol Gel Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sol Gel Technologies and Climb Bio 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 Climb Bio are associated (or correlated) with Sol Gel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sol Gel Technologies has no effect on the direction of Climb Bio i.e., Climb Bio and Sol Gel go up and down completely randomly.

Pair Corralation between Climb Bio and Sol Gel

Given the investment horizon of 90 days Climb Bio is expected to generate 1.24 times less return on investment than Sol Gel. In addition to that, Climb Bio is 1.28 times more volatile than Sol Gel Technologies. It trades about 0.2 of its total potential returns per unit of risk. Sol Gel Technologies is currently generating about 0.32 per unit of volatility. If you would invest  780.00  in Sol Gel Technologies on May 21, 2025 and sell it today you would earn a total of  830.00  from holding Sol Gel Technologies or generate 106.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Climb Bio  vs.  Sol Gel Technologies

Climb Bio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Climb Bio are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Climb Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Sol Gel Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sol Gel Technologies are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Sol Gel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Climb Bio and Sol Gel

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

The idea behind Climb Bio and Sol Gel Technologies 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.

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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.