Correlation Between Applied Molecular and Adagene
Can any of the company-specific risk be diversified away by investing in both Applied Molecular and Adagene 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 Applied Molecular and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Molecular Transport and Adagene, you can compare the effects of market volatilities on Applied Molecular and Adagene 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 Applied Molecular with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Molecular and Adagene.
Diversification Opportunities for Applied Molecular and Adagene
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Adagene is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Applied Molecular Transport and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Applied Molecular 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 Applied Molecular Transport are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Applied Molecular i.e., Applied Molecular and Adagene go up and down completely randomly.
Pair Corralation between Applied Molecular and Adagene
Given the investment horizon of 90 days Applied Molecular Transport is expected to under-perform the Adagene. In addition to that, Applied Molecular is 1.51 times more volatile than Adagene. It trades about -0.03 of its total potential returns per unit of risk. Adagene is currently generating about 0.05 per unit of volatility. If you would invest 109.00 in Adagene on August 25, 2024 and sell it today you would earn a total of 110.00 from holding Adagene or generate 100.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.99% |
| Values | Daily Returns |
Applied Molecular Transport vs. Adagene
Performance |
| Timeline |
| Applied Molecular |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Adagene |
Applied Molecular and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Molecular and Adagene
The main advantage of trading using opposite Applied Molecular and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Molecular position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Applied Molecular vs. Aileron Therapeutics | Applied Molecular vs. Bio Path Holdings | Applied Molecular vs. Benitec Biopharma Ltd | Applied Molecular vs. Aerovate Therapeutics |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 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 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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