Correlation Between Axsome Therapeutics and BioXcel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Axsome Therapeutics and BioXcel Therapeutics 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 Axsome Therapeutics and BioXcel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axsome Therapeutics and BioXcel Therapeutics, you can compare the effects of market volatilities on Axsome Therapeutics and BioXcel Therapeutics 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 Axsome Therapeutics with a short position of BioXcel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axsome Therapeutics and BioXcel Therapeutics.
Diversification Opportunities for Axsome Therapeutics and BioXcel Therapeutics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axsome and BioXcel is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Axsome Therapeutics and BioXcel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioXcel Therapeutics and Axsome Therapeutics 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 Axsome Therapeutics are associated (or correlated) with BioXcel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioXcel Therapeutics has no effect on the direction of Axsome Therapeutics i.e., Axsome Therapeutics and BioXcel Therapeutics go up and down completely randomly.
Pair Corralation between Axsome Therapeutics and BioXcel Therapeutics
Given the investment horizon of 90 days Axsome Therapeutics is expected to generate 0.42 times more return on investment than BioXcel Therapeutics. However, Axsome Therapeutics is 2.37 times less risky than BioXcel Therapeutics. It trades about 0.18 of its potential returns per unit of risk. BioXcel Therapeutics is currently generating about -0.32 per unit of risk. If you would invest 8,903 in Axsome Therapeutics on September 1, 2024 and sell it today you would earn a total of 919.00 from holding Axsome Therapeutics or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axsome Therapeutics vs. BioXcel Therapeutics
Performance |
| Timeline |
| Axsome Therapeutics |
| BioXcel Therapeutics |
Axsome Therapeutics and BioXcel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axsome Therapeutics and BioXcel Therapeutics
The main advantage of trading using opposite Axsome Therapeutics and BioXcel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axsome Therapeutics position performs unexpectedly, BioXcel Therapeutics 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 BioXcel Therapeutics will offset losses from the drop in BioXcel Therapeutics' long position.| Axsome Therapeutics vs. Incyte | Axsome Therapeutics vs. Sarepta Therapeutics | Axsome Therapeutics vs. ACADIA Pharmaceuticals | Axsome Therapeutics vs. Viking Therapeutics |
| BioXcel Therapeutics vs. Terns Pharmaceuticals | BioXcel Therapeutics vs. Amylyx Pharmaceuticals | BioXcel Therapeutics vs. Acumen Pharmaceuticals | BioXcel Therapeutics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |