Correlation Between Akebia Ther and Abeona Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Akebia Ther and Abeona 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 Akebia Ther and Abeona Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akebia Ther and Abeona Therapeutics, you can compare the effects of market volatilities on Akebia Ther and Abeona 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 Akebia Ther with a short position of Abeona Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akebia Ther and Abeona Therapeutics.

Diversification Opportunities for Akebia Ther and Abeona Therapeutics

AkebiaAbeonaDiversified AwayAkebiaAbeonaDiversified Away100%
-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Akebia and Abeona is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Akebia Ther and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and Akebia Ther 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 Akebia Ther are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of Akebia Ther i.e., Akebia Ther and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between Akebia Ther and Abeona Therapeutics

Given the investment horizon of 90 days Akebia Ther is expected to generate 0.86 times more return on investment than Abeona Therapeutics. However, Akebia Ther is 1.16 times less risky than Abeona Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Abeona Therapeutics is currently generating about 0.01 per unit of risk. If you would invest  200.00  in Akebia Ther on November 21, 2024 and sell it today you would earn a total of  7.00  from holding Akebia Ther or generate 3.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Akebia Ther  vs.  Abeona Therapeutics

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15AKBA ABEO
       Timeline  
Akebia Ther 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Akebia Ther are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Akebia Ther sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.81.922.12.22.32.4
Abeona Therapeutics 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Abeona Therapeutics may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.25.45.65.866.26.46.6

Akebia Ther and Abeona Therapeutics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.22-7.66-5.09-2.52-0.04282.525.137.7410.3612.97 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15AKBA ABEO
       Returns  

Pair Trading with Akebia Ther and Abeona Therapeutics

The main advantage of trading using opposite Akebia Ther and Abeona Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akebia Ther position performs unexpectedly, Abeona 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 Abeona Therapeutics will offset losses from the drop in Abeona Therapeutics' long position.
The idea behind Akebia Ther and Abeona Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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