Correlation Between Small Pharma and Fennec Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Small Pharma and Fennec 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 Small Pharma and Fennec Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pharma and Fennec Pharmaceuticals, you can compare the effects of market volatilities on Small Pharma and Fennec 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 Small Pharma with a short position of Fennec Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pharma and Fennec Pharmaceuticals.
Diversification Opportunities for Small Pharma and Fennec Pharmaceuticals
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Small and Fennec is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Small Pharma and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals and Small Pharma 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 Small Pharma are associated (or correlated) with Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Small Pharma i.e., Small Pharma and Fennec Pharmaceuticals go up and down completely randomly.
Pair Corralation between Small Pharma and Fennec Pharmaceuticals
Assuming the 90 days horizon Small Pharma is expected to under-perform the Fennec Pharmaceuticals. In addition to that, Small Pharma is 2.38 times more volatile than Fennec Pharmaceuticals. It trades about -0.02 of its total potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about -0.01 per unit of volatility. If you would invest 972.00 in Fennec Pharmaceuticals on November 4, 2024 and sell it today you would lose (322.00) from holding Fennec Pharmaceuticals or give up 33.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.63% |
| Values | Daily Returns |
Small Pharma vs. Fennec Pharmaceuticals
Performance |
| Timeline |
| Small Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fennec Pharmaceuticals |
Small Pharma and Fennec Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Pharma and Fennec Pharmaceuticals
The main advantage of trading using opposite Small Pharma and Fennec Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Pharma position performs unexpectedly, Fennec 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 Fennec Pharmaceuticals will offset losses from the drop in Fennec Pharmaceuticals' long position.| Small Pharma vs. Cellectis SA | Small Pharma vs. Biotron Limited | Small Pharma vs. Resverlogix Corp | Small Pharma vs. Covalon Technologies |
| Fennec Pharmaceuticals vs. Molecular Partners AG | Fennec Pharmaceuticals vs. MediciNova | Fennec Pharmaceuticals vs. Anebulo Pharmaceuticals | Fennec Pharmaceuticals vs. Champions Oncology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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