Correlation Between Armata Pharmaceuticals and Erytech Pharma
Can any of the company-specific risk be diversified away by investing in both Armata Pharmaceuticals 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 Armata Pharmaceuticals and Erytech Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armata Pharmaceuticals and Erytech Pharma SA, you can compare the effects of market volatilities on Armata Pharmaceuticals 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 Armata Pharmaceuticals with a short position of Erytech Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armata Pharmaceuticals and Erytech Pharma.
Diversification Opportunities for Armata Pharmaceuticals and Erytech Pharma
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Armata and Erytech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals 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 Armata 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 Armata Pharmaceuticals 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 Armata Pharmaceuticals i.e., Armata Pharmaceuticals and Erytech Pharma go up and down completely randomly.
Pair Corralation between Armata Pharmaceuticals and Erytech Pharma
Given the investment horizon of 90 days Armata Pharmaceuticals is expected to generate 1.56 times more return on investment than Erytech Pharma. However, Armata Pharmaceuticals is 1.56 times more volatile than Erytech Pharma SA. It trades about 0.05 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 145.00 in Armata Pharmaceuticals on September 2, 2024 and sell it today you would earn a total of 85.00 from holding Armata Pharmaceuticals or generate 58.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 3.49% |
| Values | Daily Returns |
Armata Pharmaceuticals vs. Erytech Pharma SA
Performance |
| Timeline |
| Armata Pharmaceuticals |
| Erytech Pharma SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armata Pharmaceuticals and Erytech Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armata Pharmaceuticals and Erytech Pharma
The main advantage of trading using opposite Armata Pharmaceuticals and Erytech Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armata Pharmaceuticals 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.The idea behind Armata Pharmaceuticals and Erytech Pharma SA 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.| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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