Correlation Between Enanta Pharmaceuticals and Sanofi ADR
Can any of the company-specific risk be diversified away by investing in both Enanta Pharmaceuticals and Sanofi ADR 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 Enanta Pharmaceuticals and Sanofi ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enanta Pharmaceuticals and Sanofi ADR, you can compare the effects of market volatilities on Enanta Pharmaceuticals and Sanofi ADR 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 Enanta Pharmaceuticals with a short position of Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enanta Pharmaceuticals and Sanofi ADR.
Diversification Opportunities for Enanta Pharmaceuticals and Sanofi ADR
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enanta and Sanofi is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Enanta Pharmaceuticals and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR and Enanta Pharmaceuticals 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 Enanta Pharmaceuticals are associated (or correlated) with Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Enanta Pharmaceuticals i.e., Enanta Pharmaceuticals and Sanofi ADR go up and down completely randomly.
Pair Corralation between Enanta Pharmaceuticals and Sanofi ADR
Given the investment horizon of 90 days Enanta Pharmaceuticals is expected to under-perform the Sanofi ADR. In addition to that, Enanta Pharmaceuticals is 3.41 times more volatile than Sanofi ADR. It trades about -0.2 of its total potential returns per unit of risk. Sanofi ADR is currently generating about -0.23 per unit of volatility. If you would invest 5,675 in Sanofi ADR on September 12, 2024 and sell it today you would lose (876.00) from holding Sanofi ADR or give up 15.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enanta Pharmaceuticals vs. Sanofi ADR
Performance |
| Timeline |
| Enanta Pharmaceuticals |
| Sanofi ADR |
Enanta Pharmaceuticals and Sanofi ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enanta Pharmaceuticals and Sanofi ADR
The main advantage of trading using opposite Enanta Pharmaceuticals and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enanta Pharmaceuticals position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.| Enanta Pharmaceuticals vs. Monte Rosa Therapeutics | Enanta Pharmaceuticals vs. Design Therapeutics | Enanta Pharmaceuticals vs. Werewolf Therapeutics | Enanta Pharmaceuticals vs. Ikena Oncology |
| Sanofi ADR vs. Emergent Biosolutions | Sanofi ADR vs. Bausch Health Companies | Sanofi ADR vs. Neurocrine Biosciences | Sanofi ADR vs. Teva Pharma Industries |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |