Correlation Between Aion Therapeutic and Avicanna
Can any of the company-specific risk be diversified away by investing in both Aion Therapeutic and Avicanna 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 Aion Therapeutic and Avicanna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aion Therapeutic and Avicanna, you can compare the effects of market volatilities on Aion Therapeutic and Avicanna 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 Aion Therapeutic with a short position of Avicanna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aion Therapeutic and Avicanna.
Diversification Opportunities for Aion Therapeutic and Avicanna
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aion and Avicanna is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aion Therapeutic and Avicanna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avicanna and Aion Therapeutic 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 Aion Therapeutic are associated (or correlated) with Avicanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avicanna has no effect on the direction of Aion Therapeutic i.e., Aion Therapeutic and Avicanna go up and down completely randomly.
Pair Corralation between Aion Therapeutic and Avicanna
Assuming the 90 days horizon Aion Therapeutic is expected to generate 7.24 times more return on investment than Avicanna. However, Aion Therapeutic is 7.24 times more volatile than Avicanna. It trades about 0.16 of its potential returns per unit of risk. Avicanna is currently generating about -0.04 per unit of risk. If you would invest 0.68 in Aion Therapeutic on August 29, 2024 and sell it today you would earn a total of 0.37 from holding Aion Therapeutic or generate 54.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aion Therapeutic vs. Avicanna
Performance |
| Timeline |
| Aion Therapeutic |
| Avicanna |
Aion Therapeutic and Avicanna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aion Therapeutic and Avicanna
The main advantage of trading using opposite Aion Therapeutic and Avicanna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aion Therapeutic position performs unexpectedly, Avicanna 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 Avicanna will offset losses from the drop in Avicanna's long position.The idea behind Aion Therapeutic and Avicanna 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.| Avicanna vs. Pharmacielo | Avicanna vs. Khiron Life Sciences | Avicanna vs. Flower One Holdings | Avicanna vs. Cansortium |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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