Correlation Between Avenue Therapeutics and Biodexa Pharmaceticals
Can any of the company-specific risk be diversified away by investing in both Avenue Therapeutics and Biodexa Pharmaceticals 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 Avenue Therapeutics and Biodexa Pharmaceticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avenue Therapeutics and Biodexa Pharmaceticals, you can compare the effects of market volatilities on Avenue Therapeutics and Biodexa Pharmaceticals 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 Avenue Therapeutics with a short position of Biodexa Pharmaceticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avenue Therapeutics and Biodexa Pharmaceticals.
Diversification Opportunities for Avenue Therapeutics and Biodexa Pharmaceticals
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avenue and Biodexa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Avenue Therapeutics and Biodexa Pharmaceticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodexa Pharmaceticals and Avenue 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 Avenue Therapeutics are associated (or correlated) with Biodexa Pharmaceticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodexa Pharmaceticals has no effect on the direction of Avenue Therapeutics i.e., Avenue Therapeutics and Biodexa Pharmaceticals go up and down completely randomly.
Pair Corralation between Avenue Therapeutics and Biodexa Pharmaceticals
Given the investment horizon of 90 days Avenue Therapeutics is expected to under-perform the Biodexa Pharmaceticals. But the stock apears to be less risky and, when comparing its historical volatility, Avenue Therapeutics is 1.35 times less risky than Biodexa Pharmaceticals. The stock trades about -0.15 of its potential returns per unit of risk. The Biodexa Pharmaceticals is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 568.00 in Biodexa Pharmaceticals on November 2, 2024 and sell it today you would lose (144.00) from holding Biodexa Pharmaceticals or give up 25.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avenue Therapeutics vs. Biodexa Pharmaceticals
Performance |
| Timeline |
| Avenue Therapeutics |
| Biodexa Pharmaceticals |
Avenue Therapeutics and Biodexa Pharmaceticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avenue Therapeutics and Biodexa Pharmaceticals
The main advantage of trading using opposite Avenue Therapeutics and Biodexa Pharmaceticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avenue Therapeutics position performs unexpectedly, Biodexa Pharmaceticals 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 Biodexa Pharmaceticals will offset losses from the drop in Biodexa Pharmaceticals' long position.| Avenue Therapeutics vs. Hoth Therapeutics | Avenue Therapeutics vs. Revelation Biosciences | Avenue Therapeutics vs. Virax Biolabs Group | Avenue Therapeutics vs. Palisade Bio |
| Biodexa Pharmaceticals vs. Aris Water Solutions | Biodexa Pharmaceticals vs. Carlyle Group | Biodexa Pharmaceticals vs. Kinetik Holdings | Biodexa Pharmaceticals vs. Gladstone 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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