Correlation Between Aion Therapeutic and SNDL
Can any of the company-specific risk be diversified away by investing in both Aion Therapeutic and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aion Therapeutic and SNDL Inc, you can compare the effects of market volatilities on Aion Therapeutic and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aion Therapeutic and SNDL.
Diversification Opportunities for Aion Therapeutic and SNDL
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aion and SNDL is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aion Therapeutic and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Aion Therapeutic i.e., Aion Therapeutic and SNDL go up and down completely randomly.
Pair Corralation between Aion Therapeutic and SNDL
Assuming the 90 days horizon Aion Therapeutic is expected to generate 21.48 times more return on investment than SNDL. However, Aion Therapeutic is 21.48 times more volatile than SNDL Inc. It trades about 0.16 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.04 per unit of risk. If you would invest 0.68 in Aion Therapeutic on September 12, 2024 and sell it today you would lose (0.27) from holding Aion Therapeutic or give up 39.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aion Therapeutic vs. SNDL Inc
Performance |
| Timeline |
| Aion Therapeutic |
| SNDL Inc |
Aion Therapeutic and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aion Therapeutic and SNDL
The main advantage of trading using opposite Aion Therapeutic and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aion Therapeutic position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Aion Therapeutic vs. Amexdrug | Aion Therapeutic vs. Antisense Therapeutics Limited | Aion Therapeutic vs. Alterola Biotech | Aion Therapeutic vs. HLS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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