Correlation Between Fennec Pharmaceuticals and Cognition Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals and Cognition 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 Cognition 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 Cognition Therapeutics, you can compare the effects of market volatilities on Fennec Pharmaceuticals and Cognition 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 Cognition Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Cognition Therapeutics.
Diversification Opportunities for Fennec Pharmaceuticals and Cognition Therapeutics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fennec and Cognition is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Cognition Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognition 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 Cognition Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognition Therapeutics has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Cognition Therapeutics go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and Cognition Therapeutics
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 0.58 times more return on investment than Cognition Therapeutics. However, Fennec Pharmaceuticals is 1.72 times less risky than Cognition Therapeutics. It trades about -0.07 of its potential returns per unit of risk. Cognition Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 1,122 in Fennec Pharmaceuticals on August 25, 2024 and sell it today you would lose (590.00) from holding Fennec Pharmaceuticals or give up 52.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fennec Pharmaceuticals vs. Cognition Therapeutics
Performance |
| Timeline |
| Fennec Pharmaceuticals |
| Cognition Therapeutics |
Fennec Pharmaceuticals and Cognition Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fennec Pharmaceuticals and Cognition Therapeutics
The main advantage of trading using opposite Fennec Pharmaceuticals and Cognition Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals position performs unexpectedly, Cognition 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 Cognition Therapeutics will offset losses from the drop in Cognition Therapeutics' long position.| Fennec Pharmaceuticals vs. Eliem Therapeutics | Fennec Pharmaceuticals vs. HCW Biologics | Fennec Pharmaceuticals vs. Scpharmaceuticals | Fennec Pharmaceuticals vs. Milestone Pharmaceuticals |
| Cognition Therapeutics vs. Reviva Pharmaceuticals Holdings | Cognition Therapeutics vs. Eyenovia | Cognition Therapeutics vs. Transcode Therapeutics | Cognition Therapeutics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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