Correlation Between Adverum Biotechnologies and Affimed NV
Can any of the company-specific risk be diversified away by investing in both Adverum Biotechnologies and Affimed NV 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 Adverum Biotechnologies and Affimed NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adverum Biotechnologies and Affimed NV, you can compare the effects of market volatilities on Adverum Biotechnologies and Affimed NV 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 Adverum Biotechnologies with a short position of Affimed NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adverum Biotechnologies and Affimed NV.
Diversification Opportunities for Adverum Biotechnologies and Affimed NV
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adverum and Affimed is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Adverum Biotechnologies and Affimed NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affimed NV and Adverum Biotechnologies 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 Adverum Biotechnologies are associated (or correlated) with Affimed NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affimed NV has no effect on the direction of Adverum Biotechnologies i.e., Adverum Biotechnologies and Affimed NV go up and down completely randomly.
Pair Corralation between Adverum Biotechnologies and Affimed NV
Given the investment horizon of 90 days Adverum Biotechnologies is expected to under-perform the Affimed NV. But the stock apears to be less risky and, when comparing its historical volatility, Adverum Biotechnologies is 1.46 times less risky than Affimed NV. The stock trades about -0.19 of its potential returns per unit of risk. The Affimed NV is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Affimed NV on August 30, 2024 and sell it today you would lose (51.00) from holding Affimed NV or give up 15.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adverum Biotechnologies vs. Affimed NV
Performance |
| Timeline |
| Adverum Biotechnologies |
| Affimed NV |
Adverum Biotechnologies and Affimed NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adverum Biotechnologies and Affimed NV
The main advantage of trading using opposite Adverum Biotechnologies and Affimed NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adverum Biotechnologies position performs unexpectedly, Affimed NV 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 Affimed NV will offset losses from the drop in Affimed NV's long position.| Adverum Biotechnologies vs. Uniqure NV | Adverum Biotechnologies vs. Rocket Pharmaceuticals | Adverum Biotechnologies vs. Rhythm Pharmaceuticals | Adverum Biotechnologies vs. Solid Biosciences LLC |
| Affimed NV vs. Ikena Oncology | Affimed NV vs. Eliem Therapeutics | Affimed NV vs. HCW Biologics | Affimed NV vs. Tempest 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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