Correlation Between Fennec Pharmaceuticals and Adagene
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals and Adagene 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 Fennec Pharmaceuticals and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fennec Pharmaceuticals and Adagene, you can compare the effects of market volatilities on Fennec Pharmaceuticals and Adagene 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 Fennec Pharmaceuticals with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Adagene.
Diversification Opportunities for Fennec Pharmaceuticals and Adagene
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fennec and Adagene is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Fennec 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 Fennec Pharmaceuticals are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Adagene go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and Adagene
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 1.1 times more return on investment than Adagene. However, Fennec Pharmaceuticals is 1.1 times more volatile than Adagene. It trades about 0.09 of its potential returns per unit of risk. Adagene is currently generating about 0.02 per unit of risk. If you would invest 520.00 in Fennec Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 84.00 from holding Fennec Pharmaceuticals or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fennec Pharmaceuticals vs. Adagene
Performance |
| Timeline |
| Fennec Pharmaceuticals |
| Adagene |
Fennec Pharmaceuticals and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fennec Pharmaceuticals and Adagene
The main advantage of trading using opposite Fennec Pharmaceuticals and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Fennec Pharmaceuticals vs. Eliem Therapeutics | Fennec Pharmaceuticals vs. Scpharmaceuticals | Fennec Pharmaceuticals vs. Milestone Pharmaceuticals | Fennec Pharmaceuticals vs. Seres Therapeutics |
| Adagene vs. Eliem Therapeutics | Adagene vs. Scpharmaceuticals | Adagene vs. Milestone Pharmaceuticals | Adagene vs. Seres 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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