Correlation Between Fortress Biotech and Protalix Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and Protalix Biotherapeutics 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 Fortress Biotech and Protalix Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech and Protalix Biotherapeutics, you can compare the effects of market volatilities on Fortress Biotech and Protalix Biotherapeutics 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 Fortress Biotech with a short position of Protalix Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and Protalix Biotherapeutics.
Diversification Opportunities for Fortress Biotech and Protalix Biotherapeutics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortress and Protalix is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech and Protalix Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protalix Biotherapeutics and Fortress Biotech 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 Fortress Biotech are associated (or correlated) with Protalix Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protalix Biotherapeutics has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Protalix Biotherapeutics go up and down completely randomly.
Pair Corralation between Fortress Biotech and Protalix Biotherapeutics
Given the investment horizon of 90 days Fortress Biotech is expected to under-perform the Protalix Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech is 1.33 times less risky than Protalix Biotherapeutics. The stock trades about -0.07 of its potential returns per unit of risk. The Protalix Biotherapeutics is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Protalix Biotherapeutics on August 29, 2024 and sell it today you would earn a total of 55.00 from holding Protalix Biotherapeutics or generate 48.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Biotech vs. Protalix Biotherapeutics
Performance |
| Timeline |
| Fortress Biotech |
| Protalix Biotherapeutics |
Fortress Biotech and Protalix Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Biotech and Protalix Biotherapeutics
The main advantage of trading using opposite Fortress Biotech and Protalix Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Protalix Biotherapeutics 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 Protalix Biotherapeutics will offset losses from the drop in Protalix Biotherapeutics' long position.| Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Achilles Therapeutics PLC | Fortress Biotech vs. Aptose Biosciences | Fortress Biotech vs. Fortress Biotech Pref |
| Protalix Biotherapeutics vs. Corvus Pharmaceuticals | Protalix Biotherapeutics vs. Aldeyra | Protalix Biotherapeutics vs. Checkpoint Therapeutics | Protalix Biotherapeutics vs. Cidara 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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