Correlation Between Axcella Health and Scopus Biopharma
Can any of the company-specific risk be diversified away by investing in both Axcella Health and Scopus Biopharma 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 Axcella Health and Scopus Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcella Health and Scopus Biopharma, you can compare the effects of market volatilities on Axcella Health and Scopus Biopharma 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 Axcella Health with a short position of Scopus Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcella Health and Scopus Biopharma.
Diversification Opportunities for Axcella Health and Scopus Biopharma
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axcella and Scopus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Scopus Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scopus Biopharma and Axcella Health 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 Axcella Health are associated (or correlated) with Scopus Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scopus Biopharma has no effect on the direction of Axcella Health i.e., Axcella Health and Scopus Biopharma go up and down completely randomly.
Pair Corralation between Axcella Health and Scopus Biopharma
Given the investment horizon of 90 days Axcella Health is expected to generate 2.52 times less return on investment than Scopus Biopharma. But when comparing it to its historical volatility, Axcella Health is 1.34 times less risky than Scopus Biopharma. It trades about 0.01 of its potential returns per unit of risk. Scopus Biopharma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Scopus Biopharma on September 3, 2024 and sell it today you would lose (15.00) from holding Scopus Biopharma or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.49% |
| Values | Daily Returns |
Axcella Health vs. Scopus Biopharma
Performance |
| Timeline |
| Axcella Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Scopus Biopharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Axcella Health and Scopus Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcella Health and Scopus Biopharma
The main advantage of trading using opposite Axcella Health and Scopus Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcella Health position performs unexpectedly, Scopus Biopharma 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 Scopus Biopharma will offset losses from the drop in Scopus Biopharma's long position.| Axcella Health vs. Cyclerion Therapeutics | Axcella Health vs. Kezar Life Sciences | Axcella Health vs. CytomX Therapeutics | Axcella Health vs. Assembly Biosciences |
| Scopus Biopharma vs. Scpharmaceuticals | Scopus Biopharma vs. DiaMedica Therapeutics | Scopus Biopharma vs. Monopar Therapeutics | Scopus Biopharma vs. Pasithea Therapeutics Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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