Correlation Between Axcella Health and Salarius Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Axcella Health and Salarius Pharmaceuticals 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 Salarius Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcella Health and Salarius Pharmaceuticals, you can compare the effects of market volatilities on Axcella Health and Salarius Pharmaceuticals 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 Salarius Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcella Health and Salarius Pharmaceuticals.
Diversification Opportunities for Axcella Health and Salarius Pharmaceuticals
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Axcella and Salarius is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Salarius Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salarius Pharmaceuticals 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 Salarius Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salarius Pharmaceuticals has no effect on the direction of Axcella Health i.e., Axcella Health and Salarius Pharmaceuticals go up and down completely randomly.
Pair Corralation between Axcella Health and Salarius Pharmaceuticals
If you would invest 20.00 in Axcella Health on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Axcella Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Axcella Health vs. Salarius Pharmaceuticals
Performance |
| Timeline |
| Axcella Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Salarius Pharmaceuticals |
Axcella Health and Salarius Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcella Health and Salarius Pharmaceuticals
The main advantage of trading using opposite Axcella Health and Salarius Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcella Health position performs unexpectedly, Salarius Pharmaceuticals 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 Salarius Pharmaceuticals will offset losses from the drop in Salarius Pharmaceuticals' long position.| Axcella Health vs. Cyclerion Therapeutics | Axcella Health vs. Kezar Life Sciences | Axcella Health vs. CytomX Therapeutics | Axcella Health vs. Assembly Biosciences |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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