Correlation Between Avax Techs and Eyenovia
Can any of the company-specific risk be diversified away by investing in both Avax Techs and Eyenovia 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 Avax Techs and Eyenovia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avax Techs and Eyenovia, you can compare the effects of market volatilities on Avax Techs and Eyenovia 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 Avax Techs with a short position of Eyenovia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avax Techs and Eyenovia.
Diversification Opportunities for Avax Techs and Eyenovia
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avax and Eyenovia is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Avax Techs and Eyenovia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eyenovia and Avax Techs 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 Avax Techs are associated (or correlated) with Eyenovia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eyenovia has no effect on the direction of Avax Techs i.e., Avax Techs and Eyenovia go up and down completely randomly.
Pair Corralation between Avax Techs and Eyenovia
Given the investment horizon of 90 days Avax Techs is expected to generate 0.64 times more return on investment than Eyenovia. However, Avax Techs is 1.56 times less risky than Eyenovia. It trades about -0.05 of its potential returns per unit of risk. Eyenovia is currently generating about -0.07 per unit of risk. If you would invest 0.01 in Avax Techs on August 29, 2024 and sell it today you would lose (0.01) from holding Avax Techs or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Avax Techs vs. Eyenovia
Performance |
| Timeline |
| Avax Techs |
| Eyenovia |
Avax Techs and Eyenovia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avax Techs and Eyenovia
The main advantage of trading using opposite Avax Techs and Eyenovia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avax Techs position performs unexpectedly, Eyenovia 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 Eyenovia will offset losses from the drop in Eyenovia's long position.The idea behind Avax Techs and Eyenovia 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.| Eyenovia vs. Capricor Therapeutics | Eyenovia vs. Soleno Therapeutics | Eyenovia vs. Bio Path Holdings | Eyenovia vs. Moleculin Biotech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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