Correlation Between Annexin Pharmaceuticals and ExpreS2ion Biotech
Can any of the company-specific risk be diversified away by investing in both Annexin Pharmaceuticals and ExpreS2ion Biotech 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 Annexin Pharmaceuticals and ExpreS2ion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Annexin Pharmaceuticals AB and ExpreS2ion Biotech Holding, you can compare the effects of market volatilities on Annexin Pharmaceuticals and ExpreS2ion Biotech 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 Annexin Pharmaceuticals with a short position of ExpreS2ion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Annexin Pharmaceuticals and ExpreS2ion Biotech.
Diversification Opportunities for Annexin Pharmaceuticals and ExpreS2ion Biotech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Annexin and ExpreS2ion is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Annexin Pharmaceuticals AB and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech and Annexin Pharmaceuticals 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 Annexin Pharmaceuticals AB are associated (or correlated) with ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of Annexin Pharmaceuticals i.e., Annexin Pharmaceuticals and ExpreS2ion Biotech go up and down completely randomly.
Pair Corralation between Annexin Pharmaceuticals and ExpreS2ion Biotech
Assuming the 90 days trading horizon Annexin Pharmaceuticals AB is expected to generate 1.02 times more return on investment than ExpreS2ion Biotech. However, Annexin Pharmaceuticals is 1.02 times more volatile than ExpreS2ion Biotech Holding. It trades about -0.05 of its potential returns per unit of risk. ExpreS2ion Biotech Holding is currently generating about -0.35 per unit of risk. If you would invest 54.00 in Annexin Pharmaceuticals AB on September 1, 2024 and sell it today you would lose (4.00) from holding Annexin Pharmaceuticals AB or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Annexin Pharmaceuticals AB vs. ExpreS2ion Biotech Holding
Performance |
| Timeline |
| Annexin Pharmaceuticals |
| ExpreS2ion Biotech |
Annexin Pharmaceuticals and ExpreS2ion Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Annexin Pharmaceuticals and ExpreS2ion Biotech
The main advantage of trading using opposite Annexin Pharmaceuticals and ExpreS2ion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annexin Pharmaceuticals position performs unexpectedly, ExpreS2ion Biotech 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 ExpreS2ion Biotech will offset losses from the drop in ExpreS2ion Biotech's long position.| Annexin Pharmaceuticals vs. Hansa Biopharma AB | Annexin Pharmaceuticals vs. Saniona AB | Annexin Pharmaceuticals vs. Oncopeptides AB |
| ExpreS2ion Biotech vs. Hansa Biopharma AB | ExpreS2ion Biotech vs. Saniona AB | ExpreS2ion Biotech vs. Oncopeptides AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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