Correlation Between HP and Abeona Therapeutics
Can any of the company-specific risk be diversified away by investing in both HP and Abeona 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 HP and Abeona Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Abeona Therapeutics, you can compare the effects of market volatilities on HP and Abeona 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 HP with a short position of Abeona Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Abeona Therapeutics.
Diversification Opportunities for HP and Abeona Therapeutics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HP and Abeona is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and HP 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 HP Inc are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of HP i.e., HP and Abeona Therapeutics go up and down completely randomly.
Pair Corralation between HP and Abeona Therapeutics
Considering the 90-day investment horizon HP is expected to generate 2.45 times less return on investment than Abeona Therapeutics. But when comparing it to its historical volatility, HP Inc is 2.73 times less risky than Abeona Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Abeona Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 442.00 in Abeona Therapeutics on September 1, 2024 and sell it today you would earn a total of 199.00 from holding Abeona Therapeutics or generate 45.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HP Inc vs. Abeona Therapeutics
Performance |
| Timeline |
| HP Inc |
| Abeona Therapeutics |
HP and Abeona Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Abeona Therapeutics
The main advantage of trading using opposite HP and Abeona Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Abeona 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 Abeona Therapeutics will offset losses from the drop in Abeona Therapeutics' long position.The idea behind HP Inc and Abeona Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Abeona Therapeutics vs. Tff Pharmaceuticals | Abeona Therapeutics vs. Eliem Therapeutics | Abeona Therapeutics vs. Inhibrx | Abeona Therapeutics vs. Enliven 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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