Correlation Between Fennec Pharmaceuticals and Aerovate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals and Aerovate Therapeutics 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 Aerovate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fennec Pharmaceuticals and Aerovate Therapeutics, you can compare the effects of market volatilities on Fennec Pharmaceuticals and Aerovate Therapeutics 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 Aerovate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Aerovate Therapeutics.
Diversification Opportunities for Fennec Pharmaceuticals and Aerovate Therapeutics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fennec and Aerovate is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Aerovate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerovate Therapeutics 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 Aerovate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerovate Therapeutics has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Aerovate Therapeutics go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and Aerovate Therapeutics
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 1.3 times more return on investment than Aerovate Therapeutics. However, Fennec Pharmaceuticals is 1.3 times more volatile than Aerovate Therapeutics. It trades about 0.27 of its potential returns per unit of risk. Aerovate Therapeutics is currently generating about 0.22 per unit of risk. If you would invest 447.00 in Fennec Pharmaceuticals on August 31, 2024 and sell it today you would earn a total of 154.00 from holding Fennec Pharmaceuticals or generate 34.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fennec Pharmaceuticals vs. Aerovate Therapeutics
Performance |
| Timeline |
| Fennec Pharmaceuticals |
| Aerovate Therapeutics |
Fennec Pharmaceuticals and Aerovate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fennec Pharmaceuticals and Aerovate Therapeutics
The main advantage of trading using opposite Fennec Pharmaceuticals and Aerovate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals position performs unexpectedly, Aerovate Therapeutics 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 Aerovate Therapeutics will offset losses from the drop in Aerovate Therapeutics' long position.| Fennec Pharmaceuticals vs. Molecular Partners AG | Fennec Pharmaceuticals vs. MediciNova | Fennec Pharmaceuticals vs. Anebulo Pharmaceuticals | Fennec Pharmaceuticals vs. Champions Oncology |
| Aerovate Therapeutics vs. Cue Biopharma | Aerovate Therapeutics vs. Tff Pharmaceuticals | Aerovate Therapeutics vs. Eliem Therapeutics | Aerovate Therapeutics vs. Inhibrx |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |