Correlation Between Emmaus Life and Odonate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Emmaus Life and Odonate 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 Emmaus Life and Odonate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emmaus Life Sciences and Odonate Therapeutics, you can compare the effects of market volatilities on Emmaus Life and Odonate 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 Emmaus Life with a short position of Odonate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emmaus Life and Odonate Therapeutics.
Diversification Opportunities for Emmaus Life and Odonate Therapeutics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emmaus and Odonate is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Emmaus Life Sciences and Odonate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odonate Therapeutics and Emmaus Life 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 Emmaus Life Sciences are associated (or correlated) with Odonate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odonate Therapeutics has no effect on the direction of Emmaus Life i.e., Emmaus Life and Odonate Therapeutics go up and down completely randomly.
Pair Corralation between Emmaus Life and Odonate Therapeutics
Given the investment horizon of 90 days Emmaus Life Sciences is expected to generate 3.56 times more return on investment than Odonate Therapeutics. However, Emmaus Life is 3.56 times more volatile than Odonate Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Odonate Therapeutics is currently generating about 0.06 per unit of risk. If you would invest 31.00 in Emmaus Life Sciences on August 31, 2024 and sell it today you would lose (5.00) from holding Emmaus Life Sciences or give up 16.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 17.04% |
| Values | Daily Returns |
Emmaus Life Sciences vs. Odonate Therapeutics
Performance |
| Timeline |
| Emmaus Life Sciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Odonate Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Emmaus Life and Odonate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emmaus Life and Odonate Therapeutics
The main advantage of trading using opposite Emmaus Life and Odonate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emmaus Life position performs unexpectedly, Odonate 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 Odonate Therapeutics will offset losses from the drop in Odonate Therapeutics' long position.| Emmaus Life vs. NRx Pharmaceuticals | Emmaus Life vs. Cell Source | Emmaus Life vs. Anebulo Pharmaceuticals | Emmaus Life vs. Adagene |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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