Correlation Between Adagene and AnaptysBio
Can any of the company-specific risk be diversified away by investing in both Adagene and AnaptysBio 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 AnaptysBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and AnaptysBio, you can compare the effects of market volatilities on Adagene and AnaptysBio 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 AnaptysBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and AnaptysBio.
Diversification Opportunities for Adagene and AnaptysBio
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adagene and AnaptysBio is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and AnaptysBio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AnaptysBio 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 AnaptysBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AnaptysBio has no effect on the direction of Adagene i.e., Adagene and AnaptysBio go up and down completely randomly.
Pair Corralation between Adagene and AnaptysBio
Given the investment horizon of 90 days Adagene is expected to generate 0.71 times more return on investment than AnaptysBio. However, Adagene is 1.41 times less risky than AnaptysBio. It trades about -0.21 of its potential returns per unit of risk. AnaptysBio is currently generating about -0.18 per unit of risk. If you would invest 290.00 in Adagene on August 25, 2024 and sell it today you would lose (71.00) from holding Adagene or give up 24.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. AnaptysBio
Performance |
| Timeline |
| Adagene |
| AnaptysBio |
Adagene and AnaptysBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and AnaptysBio
The main advantage of trading using opposite Adagene and AnaptysBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, AnaptysBio 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 AnaptysBio will offset losses from the drop in AnaptysBio's long position.| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
| AnaptysBio vs. Crinetics Pharmaceuticals | AnaptysBio vs. Rhythm Pharmaceuticals | AnaptysBio vs. Kura Oncology | AnaptysBio vs. CytomX 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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