Correlation Between Anavex Life and Entera Bio
Can any of the company-specific risk be diversified away by investing in both Anavex Life and Entera Bio 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 Anavex Life and Entera Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anavex Life Sciences and Entera Bio, you can compare the effects of market volatilities on Anavex Life and Entera Bio 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 Anavex Life with a short position of Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anavex Life and Entera Bio.
Diversification Opportunities for Anavex Life and Entera Bio
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anavex and Entera is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Anavex Life Sciences and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio and Anavex Life 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 Anavex Life Sciences are associated (or correlated) with Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of Anavex Life i.e., Anavex Life and Entera Bio go up and down completely randomly.
Pair Corralation between Anavex Life and Entera Bio
Given the investment horizon of 90 days Anavex Life is expected to generate 3.79 times less return on investment than Entera Bio. In addition to that, Anavex Life is 1.03 times more volatile than Entera Bio. It trades about 0.06 of its total potential returns per unit of risk. Entera Bio is currently generating about 0.22 per unit of volatility. If you would invest 178.00 in Entera Bio on September 15, 2024 and sell it today you would earn a total of 42.00 from holding Entera Bio or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anavex Life Sciences vs. Entera Bio
Performance |
| Timeline |
| Anavex Life Sciences |
| Entera Bio |
Anavex Life and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anavex Life and Entera Bio
The main advantage of trading using opposite Anavex Life and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anavex Life position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| Anavex Life vs. Cassava Sciences | Anavex Life vs. INmune Bio | Anavex Life vs. Biovie Inc | Anavex Life vs. Cognition Therapeutics |
| Entera Bio vs. Puma Biotechnology | Entera Bio vs. Iovance Biotherapeutics | Entera Bio vs. Day One Biopharmaceuticals | Entera Bio vs. Inozyme Pharma |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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