Correlation Between AN2 Therapeutics and Arena Group
Can any of the company-specific risk be diversified away by investing in both AN2 Therapeutics and Arena Group 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 AN2 Therapeutics and Arena Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AN2 Therapeutics and Arena Group Holdings, you can compare the effects of market volatilities on AN2 Therapeutics and Arena Group 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 AN2 Therapeutics with a short position of Arena Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AN2 Therapeutics and Arena Group.
Diversification Opportunities for AN2 Therapeutics and Arena Group
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between AN2 and Arena is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding AN2 Therapeutics and Arena Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Group Holdings and AN2 Therapeutics 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 AN2 Therapeutics are associated (or correlated) with Arena Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Group Holdings has no effect on the direction of AN2 Therapeutics i.e., AN2 Therapeutics and Arena Group go up and down completely randomly.
Pair Corralation between AN2 Therapeutics and Arena Group
Given the investment horizon of 90 days AN2 Therapeutics is expected to under-perform the Arena Group. But the stock apears to be less risky and, when comparing its historical volatility, AN2 Therapeutics is 1.78 times less risky than Arena Group. The stock trades about -0.02 of its potential returns per unit of risk. The Arena Group Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 424.00 in Arena Group Holdings on August 24, 2024 and sell it today you would lose (269.00) from holding Arena Group Holdings or give up 63.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AN2 Therapeutics vs. Arena Group Holdings
Performance |
| Timeline |
| AN2 Therapeutics |
| Arena Group Holdings |
AN2 Therapeutics and Arena Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AN2 Therapeutics and Arena Group
The main advantage of trading using opposite AN2 Therapeutics and Arena Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AN2 Therapeutics position performs unexpectedly, Arena Group 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 Arena Group will offset losses from the drop in Arena Group's long position.| AN2 Therapeutics vs. Aerovate Therapeutics | AN2 Therapeutics vs. Adagene | AN2 Therapeutics vs. Acrivon Therapeutics, Common | AN2 Therapeutics vs. Rezolute |
| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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