Correlation Between Adagene and ABVC Biopharma
Can any of the company-specific risk be diversified away by investing in both Adagene and ABVC Biopharma 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 Adagene and ABVC Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and ABVC Biopharma, you can compare the effects of market volatilities on Adagene and ABVC Biopharma 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 Adagene with a short position of ABVC Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and ABVC Biopharma.
Diversification Opportunities for Adagene and ABVC Biopharma
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adagene and ABVC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and ABVC Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABVC Biopharma and Adagene 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 Adagene are associated (or correlated) with ABVC Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABVC Biopharma has no effect on the direction of Adagene i.e., Adagene and ABVC Biopharma go up and down completely randomly.
Pair Corralation between Adagene and ABVC Biopharma
Given the investment horizon of 90 days Adagene is expected to generate 0.94 times more return on investment than ABVC Biopharma. However, Adagene is 1.07 times less risky than ABVC Biopharma. It trades about 0.05 of its potential returns per unit of risk. ABVC Biopharma is currently generating about -0.02 per unit of risk. If you would invest 175.00 in Adagene on August 26, 2024 and sell it today you would earn a total of 44.00 from holding Adagene or generate 25.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. ABVC Biopharma
Performance |
| Timeline |
| Adagene |
| ABVC Biopharma |
Adagene and ABVC Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and ABVC Biopharma
The main advantage of trading using opposite Adagene and ABVC Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, ABVC Biopharma 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 ABVC Biopharma will offset losses from the drop in ABVC Biopharma's long position.| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
| ABVC Biopharma vs. Indaptus Therapeutics | ABVC Biopharma vs. Pasithea Therapeutics Corp | ABVC Biopharma vs. Forte Biosciences | ABVC Biopharma vs. Aileron Therapeutics |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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