Correlation Between Affimed NV and Evofem Biosciences
Can any of the company-specific risk be diversified away by investing in both Affimed NV and Evofem Biosciences 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 Affimed NV and Evofem Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affimed NV and Evofem Biosciences, you can compare the effects of market volatilities on Affimed NV and Evofem Biosciences 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 Affimed NV with a short position of Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affimed NV and Evofem Biosciences.
Diversification Opportunities for Affimed NV and Evofem Biosciences
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Affimed and Evofem is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Affimed NV and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences and Affimed NV 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 Affimed NV are associated (or correlated) with Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Affimed NV i.e., Affimed NV and Evofem Biosciences go up and down completely randomly.
Pair Corralation between Affimed NV and Evofem Biosciences
Given the investment horizon of 90 days Affimed NV is expected to generate 0.43 times more return on investment than Evofem Biosciences. However, Affimed NV is 2.33 times less risky than Evofem Biosciences. It trades about -0.05 of its potential returns per unit of risk. Evofem Biosciences is currently generating about -0.08 per unit of risk. If you would invest 1,070 in Affimed NV on November 1, 2024 and sell it today you would lose (977.00) from holding Affimed NV or give up 91.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 21.86% |
| Values | Daily Returns |
Affimed NV vs. Evofem Biosciences
Performance |
| Timeline |
| Affimed NV |
| Evofem Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Affimed NV and Evofem Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affimed NV and Evofem Biosciences
The main advantage of trading using opposite Affimed NV and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affimed NV position performs unexpectedly, Evofem Biosciences 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 Evofem Biosciences will offset losses from the drop in Evofem Biosciences' long position.| Affimed NV vs. ADC Therapeutics SA | Affimed NV vs. Agenus Inc | Affimed NV vs. X4 Pharmaceuticals | Affimed NV vs. Terns Pharmaceuticals |
| Evofem Biosciences vs. Minerals Technologies | Evofem Biosciences vs. Harmony Gold Mining | Evofem Biosciences vs. Diageo PLC ADR | Evofem Biosciences vs. Diamond Estates Wines |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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