Correlation Between Eterna Therapeutics and Fortress Biotech
Can any of the company-specific risk be diversified away by investing in both Eterna Therapeutics and Fortress Biotech 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 Eterna Therapeutics and Fortress Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eterna Therapeutics and Fortress Biotech, you can compare the effects of market volatilities on Eterna Therapeutics and Fortress Biotech 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 Eterna Therapeutics with a short position of Fortress Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eterna Therapeutics and Fortress Biotech.
Diversification Opportunities for Eterna Therapeutics and Fortress Biotech
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eterna and Fortress is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eterna Therapeutics and Fortress Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech and Eterna Therapeutics 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 Eterna Therapeutics are associated (or correlated) with Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech has no effect on the direction of Eterna Therapeutics i.e., Eterna Therapeutics and Fortress Biotech go up and down completely randomly.
Pair Corralation between Eterna Therapeutics and Fortress Biotech
Given the investment horizon of 90 days Eterna Therapeutics is expected to under-perform the Fortress Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Eterna Therapeutics is 1.09 times less risky than Fortress Biotech. The stock trades about -0.06 of its potential returns per unit of risk. The Fortress Biotech is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Fortress Biotech on September 12, 2024 and sell it today you would lose (467.00) from holding Fortress Biotech or give up 69.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eterna Therapeutics vs. Fortress Biotech
Performance |
| Timeline |
| Eterna Therapeutics |
| Fortress Biotech |
Eterna Therapeutics and Fortress Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eterna Therapeutics and Fortress Biotech
The main advantage of trading using opposite Eterna Therapeutics and Fortress Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eterna Therapeutics position performs unexpectedly, Fortress Biotech 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 Fortress Biotech will offset losses from the drop in Fortress Biotech's long position.| Eterna Therapeutics vs. Equillium | Eterna Therapeutics vs. DiaMedica Therapeutics | Eterna Therapeutics vs. Valneva SE ADR | Eterna Therapeutics vs. Vivani Medical |
| Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Achilles Therapeutics PLC | Fortress Biotech vs. Aptose Biosciences | Fortress Biotech vs. Fortress Biotech Pref |
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.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |