Correlation Between Adagene and Avid Bioservices
Can any of the company-specific risk be diversified away by investing in both Adagene and Avid Bioservices 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 Avid Bioservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and Avid Bioservices, you can compare the effects of market volatilities on Adagene and Avid Bioservices 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 Avid Bioservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and Avid Bioservices.
Diversification Opportunities for Adagene and Avid Bioservices
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adagene and Avid is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Avid Bioservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avid Bioservices 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 Avid Bioservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avid Bioservices has no effect on the direction of Adagene i.e., Adagene and Avid Bioservices go up and down completely randomly.
Pair Corralation between Adagene and Avid Bioservices
Given the investment horizon of 90 days Adagene is expected to under-perform the Avid Bioservices. In addition to that, Adagene is 1.82 times more volatile than Avid Bioservices. It trades about -0.21 of its total potential returns per unit of risk. Avid Bioservices is currently generating about 0.33 per unit of volatility. If you would invest 1,027 in Avid Bioservices on September 2, 2024 and sell it today you would earn a total of 201.00 from holding Avid Bioservices or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. Avid Bioservices
Performance |
| Timeline |
| Adagene |
| Avid Bioservices |
Adagene and Avid Bioservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and Avid Bioservices
The main advantage of trading using opposite Adagene and Avid Bioservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, Avid Bioservices 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 Avid Bioservices will offset losses from the drop in Avid Bioservices' long position.| Adagene vs. Tff Pharmaceuticals | Adagene vs. Eliem Therapeutics | Adagene vs. Inhibrx | Adagene vs. Enliven Therapeutics |
| Avid Bioservices vs. Anebulo Pharmaceuticals | Avid Bioservices vs. Adagene | Avid Bioservices vs. Acrivon Therapeutics, Common | Avid Bioservices vs. AnaptysBio |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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