Correlation Between Fortress Biotech and Checkpoint Therapeutics

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

Diversification Opportunities for Fortress Biotech and Checkpoint Therapeutics

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Fortress and Checkpoint is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and Checkpoint Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Checkpoint Therapeutics and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with Checkpoint Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Checkpoint Therapeutics has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Checkpoint Therapeutics go up and down completely randomly.

Pair Corralation between Fortress Biotech and Checkpoint Therapeutics

Assuming the 90 days horizon Fortress Biotech is expected to generate 5.87 times less return on investment than Checkpoint Therapeutics. But when comparing it to its historical volatility, Fortress Biotech Pref is 1.05 times less risky than Checkpoint Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Checkpoint Therapeutics is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  254.00  in Checkpoint Therapeutics on August 13, 2024 and sell it today you would earn a total of  83.00  from holding Checkpoint Therapeutics or generate 32.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fortress Biotech Pref  vs.  Checkpoint Therapeutics

 Performance 
       Timeline  
Fortress Biotech Pref 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fortress Biotech Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
Checkpoint Therapeutics 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Checkpoint Therapeutics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Checkpoint Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fortress Biotech and Checkpoint Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortress Biotech and Checkpoint Therapeutics

The main advantage of trading using opposite Fortress Biotech and Checkpoint Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Checkpoint 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 Checkpoint Therapeutics will offset losses from the drop in Checkpoint Therapeutics' long position.
The idea behind Fortress Biotech Pref and Checkpoint 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 Stocks Directory module to find actively traded stocks across global markets.

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