Correlation Between NYSE Composite and Adagene
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Adagene 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 NYSE Composite and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Adagene, you can compare the effects of market volatilities on NYSE Composite and Adagene 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 NYSE Composite with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Adagene.
Diversification Opportunities for NYSE Composite and Adagene
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Adagene is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and NYSE Composite 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 NYSE Composite are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of NYSE Composite i.e., NYSE Composite and Adagene go up and down completely randomly.
Pair Corralation between NYSE Composite and Adagene
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.75 times less return on investment than Adagene. But when comparing it to its historical volatility, NYSE Composite is 9.58 times less risky than Adagene. It trades about 0.11 of its potential returns per unit of risk. Adagene is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Adagene on August 31, 2024 and sell it today you would earn a total of 99.00 from holding Adagene or generate 73.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Adagene
Performance |
| Timeline |
NYSE Composite and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Adagene
Pair trading matchups for Adagene
Pair Trading with NYSE Composite and Adagene
The main advantage of trading using opposite NYSE Composite and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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