Correlation Between Durect and Apellis Pharmaceuticals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Durect and Apellis 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 Durect and Apellis Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and Apellis Pharmaceuticals, you can compare the effects of market volatilities on Durect and Apellis 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 Durect with a short position of Apellis Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and Apellis Pharmaceuticals.

Diversification Opportunities for Durect and Apellis Pharmaceuticals

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Durect and Apellis is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Durect and Apellis Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apellis Pharmaceuticals and Durect 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 Durect are associated (or correlated) with Apellis Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apellis Pharmaceuticals has no effect on the direction of Durect i.e., Durect and Apellis Pharmaceuticals go up and down completely randomly.

Pair Corralation between Durect and Apellis Pharmaceuticals

Given the investment horizon of 90 days Durect is expected to generate 1.31 times more return on investment than Apellis Pharmaceuticals. However, Durect is 1.31 times more volatile than Apellis Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Apellis Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest  86.00  in Durect on October 20, 2024 and sell it today you would lose (1.00) from holding Durect or give up 1.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Durect  vs.  Apellis Pharmaceuticals

 Performance 
       Timeline  
Durect 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Durect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Apellis Pharmaceuticals 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Apellis Pharmaceuticals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Apellis Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Durect and Apellis Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Durect and Apellis Pharmaceuticals

The main advantage of trading using opposite Durect and Apellis Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect position performs unexpectedly, Apellis 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 Apellis Pharmaceuticals will offset losses from the drop in Apellis Pharmaceuticals' long position.
The idea behind Durect and Apellis Pharmaceuticals 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.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA