Correlation Between Applied Molecular and Erytech Pharma
Can any of the company-specific risk be diversified away by investing in both Applied Molecular and Erytech Pharma 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 Erytech Pharma 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 Erytech Pharma SA, you can compare the effects of market volatilities on Applied Molecular and Erytech Pharma 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 Erytech Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Molecular and Erytech Pharma.
Diversification Opportunities for Applied Molecular and Erytech Pharma
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Erytech is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Applied Molecular Transport and Erytech Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erytech Pharma SA 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 Erytech Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erytech Pharma SA has no effect on the direction of Applied Molecular i.e., Applied Molecular and Erytech Pharma go up and down completely randomly.
Pair Corralation between Applied Molecular and Erytech Pharma
Given the investment horizon of 90 days Applied Molecular Transport is expected to generate 1.41 times more return on investment than Erytech Pharma. However, Applied Molecular is 1.41 times more volatile than Erytech Pharma SA. It trades about 0.01 of its potential returns per unit of risk. Erytech Pharma SA is currently generating about -0.03 per unit of risk. If you would invest 34.00 in Applied Molecular Transport on September 2, 2024 and sell it today you would lose (1.00) from holding Applied Molecular Transport or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.33% |
| Values | Daily Returns |
Applied Molecular Transport vs. Erytech Pharma SA
Performance |
| Timeline |
| Applied Molecular |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Erytech Pharma SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Applied Molecular and Erytech Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Molecular and Erytech Pharma
The main advantage of trading using opposite Applied Molecular and Erytech Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Molecular position performs unexpectedly, Erytech Pharma 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 Erytech Pharma will offset losses from the drop in Erytech Pharma'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 |
| Erytech Pharma vs. Genfit | Erytech Pharma vs. Eliem Therapeutics | Erytech Pharma vs. HCW Biologics | Erytech Pharma vs. Aptorum Group Ltd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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