Correlation Between Alx Oncology and Fennec Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Alx Oncology and Fennec Pharmaceuticals 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 Alx Oncology and Fennec Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alx Oncology Holdings and Fennec Pharmaceuticals, you can compare the effects of market volatilities on Alx Oncology and Fennec Pharmaceuticals 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 Alx Oncology with a short position of Fennec Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alx Oncology and Fennec Pharmaceuticals.
Diversification Opportunities for Alx Oncology and Fennec Pharmaceuticals
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alx and Fennec is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alx Oncology Holdings and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals and Alx Oncology 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 Alx Oncology Holdings are associated (or correlated) with Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Alx Oncology i.e., Alx Oncology and Fennec Pharmaceuticals go up and down completely randomly.
Pair Corralation between Alx Oncology and Fennec Pharmaceuticals
Given the investment horizon of 90 days Alx Oncology is expected to generate 3.1 times less return on investment than Fennec Pharmaceuticals. But when comparing it to its historical volatility, Alx Oncology Holdings is 1.42 times less risky than Fennec Pharmaceuticals. It trades about 0.12 of its potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 447.00 in Fennec Pharmaceuticals on August 31, 2024 and sell it today you would earn a total of 154.00 from holding Fennec Pharmaceuticals or generate 34.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alx Oncology Holdings vs. Fennec Pharmaceuticals
Performance |
| Timeline |
| Alx Oncology Holdings |
| Fennec Pharmaceuticals |
Alx Oncology and Fennec Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alx Oncology and Fennec Pharmaceuticals
The main advantage of trading using opposite Alx Oncology and Fennec Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alx Oncology position performs unexpectedly, Fennec Pharmaceuticals 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 Fennec Pharmaceuticals will offset losses from the drop in Fennec Pharmaceuticals' long position.| Alx Oncology vs. Cabaletta Bio | Alx Oncology vs. Viracta Therapeutics | Alx Oncology vs. Eyepoint Pharmaceuticals | Alx Oncology vs. Biomea Fusion |
| Fennec Pharmaceuticals vs. Molecular Partners AG | Fennec Pharmaceuticals vs. MediciNova | Fennec Pharmaceuticals vs. Anebulo Pharmaceuticals | Fennec Pharmaceuticals vs. Champions Oncology |
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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