Correlation Between Fortress Biotech and Wesana Health
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and Wesana Health 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 Wesana Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech Pref and Wesana Health Holdings, you can compare the effects of market volatilities on Fortress Biotech and Wesana Health 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 Wesana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and Wesana Health.
Diversification Opportunities for Fortress Biotech and Wesana Health
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortress and Wesana is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and Wesana Health Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesana Health Holdings 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 Pref are associated (or correlated) with Wesana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesana Health Holdings has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Wesana Health go up and down completely randomly.
Pair Corralation between Fortress Biotech and Wesana Health
Assuming the 90 days horizon Fortress Biotech Pref is expected to under-perform the Wesana Health. But the preferred stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech Pref is 5.78 times less risky than Wesana Health. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Wesana Health Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1.22 in Wesana Health Holdings on August 27, 2024 and sell it today you would lose (0.89) from holding Wesana Health Holdings or give up 72.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Biotech Pref vs. Wesana Health Holdings
Performance |
| Timeline |
| Fortress Biotech Pref |
| Wesana Health Holdings |
Fortress Biotech and Wesana Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Biotech and Wesana Health
The main advantage of trading using opposite Fortress Biotech and Wesana Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Wesana Health 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 Wesana Health will offset losses from the drop in Wesana Health's long position.| Fortress Biotech vs. Checkpoint Therapeutics | Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Reviva Pharmaceuticals Holdings | Fortress Biotech vs. Kodiak Sciences |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |