Correlation Between Entera Bio and Anavex Life
Can any of the company-specific risk be diversified away by investing in both Entera Bio and Anavex Life 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 Entera Bio and Anavex Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entera Bio and Anavex Life Sciences, you can compare the effects of market volatilities on Entera Bio and Anavex Life 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 Entera Bio with a short position of Anavex Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entera Bio and Anavex Life.
Diversification Opportunities for Entera Bio and Anavex Life
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Entera and Anavex is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Entera Bio and Anavex Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anavex Life Sciences and Entera Bio 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 Entera Bio are associated (or correlated) with Anavex Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anavex Life Sciences has no effect on the direction of Entera Bio i.e., Entera Bio and Anavex Life go up and down completely randomly.
Pair Corralation between Entera Bio and Anavex Life
Given the investment horizon of 90 days Entera Bio is expected to generate 0.97 times more return on investment than Anavex Life. However, Entera Bio is 1.03 times less risky than Anavex Life. It trades about 0.22 of its potential returns per unit of risk. Anavex Life Sciences is currently generating about 0.06 per unit of risk. If you would invest 178.00 in Entera Bio on September 15, 2024 and sell it today you would earn a total of 42.00 from holding Entera Bio or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entera Bio vs. Anavex Life Sciences
Performance |
| Timeline |
| Entera Bio |
| Anavex Life Sciences |
Entera Bio and Anavex Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entera Bio and Anavex Life
The main advantage of trading using opposite Entera Bio and Anavex Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entera Bio position performs unexpectedly, Anavex Life 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 Anavex Life will offset losses from the drop in Anavex Life's long position.| Entera Bio vs. Puma Biotechnology | Entera Bio vs. Iovance Biotherapeutics | Entera Bio vs. Day One Biopharmaceuticals | Entera Bio vs. Inozyme Pharma |
| Anavex Life vs. Cassava Sciences | Anavex Life vs. INmune Bio | Anavex Life vs. Biovie Inc | Anavex Life vs. Cognition Therapeutics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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