Correlation Between ENDRA Life and AbbVie
Can any of the company-specific risk be diversified away by investing in both ENDRA Life and AbbVie 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 ENDRA Life and AbbVie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENDRA Life Sciences and AbbVie Inc, you can compare the effects of market volatilities on ENDRA Life and AbbVie 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 ENDRA Life with a short position of AbbVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENDRA Life and AbbVie.
Diversification Opportunities for ENDRA Life and AbbVie
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENDRA and AbbVie is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ENDRA Life Sciences and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie Inc and ENDRA Life 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 ENDRA Life Sciences are associated (or correlated) with AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of ENDRA Life i.e., ENDRA Life and AbbVie go up and down completely randomly.
Pair Corralation between ENDRA Life and AbbVie
Given the investment horizon of 90 days ENDRA Life Sciences is expected to generate 4.57 times more return on investment than AbbVie. However, ENDRA Life is 4.57 times more volatile than AbbVie Inc. It trades about 0.07 of its potential returns per unit of risk. AbbVie Inc is currently generating about -0.28 per unit of risk. If you would invest 536.00 in ENDRA Life Sciences on October 25, 2024 and sell it today you would earn a total of 24.00 from holding ENDRA Life Sciences or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENDRA Life Sciences vs. AbbVie Inc
Performance |
| Timeline |
| ENDRA Life Sciences |
| AbbVie Inc |
ENDRA Life and AbbVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENDRA Life and AbbVie
The main advantage of trading using opposite ENDRA Life and AbbVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENDRA Life position performs unexpectedly, AbbVie 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 AbbVie will offset losses from the drop in AbbVie's long position.| ENDRA Life vs. Burning Rock Biotech | ENDRA Life vs. Neuronetics | ENDRA Life vs. DarioHealth Corp | ENDRA Life vs. Sera Prognostics |
| AbbVie vs. Merck Company | AbbVie vs. Pfizer Inc | AbbVie vs. Eli Lilly and | AbbVie vs. Bristol Myers Squibb |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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