Correlation Between Athenex and Now Corp
Can any of the company-specific risk be diversified away by investing in both Athenex and Now Corp 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 Athenex and Now Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athenex and Now Corp, you can compare the effects of market volatilities on Athenex and Now Corp 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 Athenex with a short position of Now Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athenex and Now Corp.
Diversification Opportunities for Athenex and Now Corp
Very good diversification
The 3 months correlation between Athenex and Now is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Athenex and Now Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Corp and Athenex 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 Athenex are associated (or correlated) with Now Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Corp has no effect on the direction of Athenex i.e., Athenex and Now Corp go up and down completely randomly.
Pair Corralation between Athenex and Now Corp
If you would invest 0.02 in Now Corp on August 28, 2024 and sell it today you would lose (0.01) from holding Now Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Athenex vs. Now Corp
Performance |
| Timeline |
| Athenex |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Now Corp |
Athenex and Now Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athenex and Now Corp
The main advantage of trading using opposite Athenex and Now Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athenex position performs unexpectedly, Now Corp 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 Now Corp will offset losses from the drop in Now Corp's long position.The idea behind Athenex and Now Corp 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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