Correlation Between Aeterna Zentaris and Avenue Therapeutics
Can any of the company-specific risk be diversified away by investing in both Aeterna Zentaris and Avenue 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 Aeterna Zentaris and Avenue Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeterna Zentaris and Avenue Therapeutics, you can compare the effects of market volatilities on Aeterna Zentaris and Avenue 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 Aeterna Zentaris with a short position of Avenue Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeterna Zentaris and Avenue Therapeutics.
Diversification Opportunities for Aeterna Zentaris and Avenue Therapeutics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aeterna and Avenue is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aeterna Zentaris and Avenue Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avenue Therapeutics and Aeterna Zentaris 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 Aeterna Zentaris are associated (or correlated) with Avenue Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avenue Therapeutics has no effect on the direction of Aeterna Zentaris i.e., Aeterna Zentaris and Avenue Therapeutics go up and down completely randomly.
Pair Corralation between Aeterna Zentaris and Avenue Therapeutics
Given the investment horizon of 90 days Aeterna Zentaris is expected to generate 0.52 times more return on investment than Avenue Therapeutics. However, Aeterna Zentaris is 1.92 times less risky than Avenue Therapeutics. It trades about -0.03 of its potential returns per unit of risk. Avenue Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 1,460 in Aeterna Zentaris on September 3, 2024 and sell it today you would lose (846.00) from holding Aeterna Zentaris or give up 57.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 84.24% |
| Values | Daily Returns |
Aeterna Zentaris vs. Avenue Therapeutics
Performance |
| Timeline |
| Aeterna Zentaris |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Avenue Therapeutics |
Aeterna Zentaris and Avenue Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeterna Zentaris and Avenue Therapeutics
The main advantage of trading using opposite Aeterna Zentaris and Avenue Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeterna Zentaris position performs unexpectedly, Avenue 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 Avenue Therapeutics will offset losses from the drop in Avenue Therapeutics' long position.| Aeterna Zentaris vs. Pulmatrix | Aeterna Zentaris vs. Bio Path Holdings | Aeterna Zentaris vs. Moleculin Biotech | Aeterna Zentaris vs. Adial Pharmaceuticals |
| Avenue Therapeutics vs. Hoth Therapeutics | Avenue Therapeutics vs. Revelation Biosciences | Avenue Therapeutics vs. Neurobo Pharmaceuticals | Avenue Therapeutics vs. Virax Biolabs Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |