Correlation Between Anavex Life and Flex
Can any of the company-specific risk be diversified away by investing in both Anavex Life and Flex 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 Flex 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 Flex, you can compare the effects of market volatilities on Anavex Life and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anavex Life and Flex.
Diversification Opportunities for Anavex Life and Flex
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anavex and Flex is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Anavex Life Sciences and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Anavex Life i.e., Anavex Life and Flex go up and down completely randomly.
Pair Corralation between Anavex Life and Flex
Given the investment horizon of 90 days Anavex Life is expected to generate 3.33 times less return on investment than Flex. In addition to that, Anavex Life is 1.23 times more volatile than Flex. It trades about 0.02 of its total potential returns per unit of risk. Flex is currently generating about 0.08 per unit of volatility. If you would invest 1,112 in Flex on November 2, 2024 and sell it today you would earn a total of 3,096 from holding Flex or generate 278.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anavex Life Sciences vs. Flex
Performance |
| Timeline |
| Anavex Life Sciences |
| Flex |
Anavex Life and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anavex Life and Flex
The main advantage of trading using opposite Anavex Life and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anavex Life position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Anavex Life vs. Cassava Sciences | Anavex Life vs. INmune Bio | Anavex Life vs. Biovie Inc | Anavex Life vs. Cognition Therapeutics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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