Correlation Between Fennec Pharmaceuticals and Gain Therapeutics
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals and Gain 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 Gain 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 Gain Therapeutics, you can compare the effects of market volatilities on Fennec Pharmaceuticals and Gain 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 Gain Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Gain Therapeutics.
Diversification Opportunities for Fennec Pharmaceuticals and Gain Therapeutics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fennec and Gain is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Gain Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gain 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 Gain Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gain Therapeutics has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Gain Therapeutics go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and Gain Therapeutics
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to under-perform the Gain Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Fennec Pharmaceuticals is 1.97 times less risky than Gain Therapeutics. The stock trades about 0.0 of its potential returns per unit of risk. The Gain Therapeutics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Gain Therapeutics on August 29, 2024 and sell it today you would lose (82.00) from holding Gain Therapeutics or give up 32.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fennec Pharmaceuticals vs. Gain Therapeutics
Performance |
| Timeline |
| Fennec Pharmaceuticals |
| Gain Therapeutics |
Fennec Pharmaceuticals and Gain Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fennec Pharmaceuticals and Gain Therapeutics
The main advantage of trading using opposite Fennec Pharmaceuticals and Gain Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals position performs unexpectedly, Gain 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 Gain Therapeutics will offset losses from the drop in Gain Therapeutics' long position.| Fennec Pharmaceuticals vs. Eliem Therapeutics | Fennec Pharmaceuticals vs. Scpharmaceuticals | Fennec Pharmaceuticals vs. Milestone Pharmaceuticals | Fennec Pharmaceuticals vs. Seres Therapeutics |
| Gain Therapeutics vs. Biovie Inc | Gain Therapeutics vs. In8bio Inc | Gain Therapeutics vs. NewAmsterdam Pharma | Gain Therapeutics vs. Cue Biopharma |
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.
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