Correlation Between Recursion Pharmaceuticals and Affimed NV
Can any of the company-specific risk be diversified away by investing in both Recursion Pharmaceuticals and Affimed NV 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 Recursion Pharmaceuticals and Affimed NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recursion Pharmaceuticals and Affimed NV, you can compare the effects of market volatilities on Recursion Pharmaceuticals and Affimed NV 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 Recursion Pharmaceuticals with a short position of Affimed NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recursion Pharmaceuticals and Affimed NV.
Diversification Opportunities for Recursion Pharmaceuticals and Affimed NV
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Recursion and Affimed is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Recursion Pharmaceuticals and Affimed NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affimed NV and Recursion 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 Recursion Pharmaceuticals are associated (or correlated) with Affimed NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affimed NV has no effect on the direction of Recursion Pharmaceuticals i.e., Recursion Pharmaceuticals and Affimed NV go up and down completely randomly.
Pair Corralation between Recursion Pharmaceuticals and Affimed NV
Given the investment horizon of 90 days Recursion Pharmaceuticals is expected to generate 0.77 times more return on investment than Affimed NV. However, Recursion Pharmaceuticals is 1.29 times less risky than Affimed NV. It trades about -0.13 of its potential returns per unit of risk. Affimed NV is currently generating about -0.13 per unit of risk. If you would invest 687.00 in Recursion Pharmaceuticals on August 29, 2024 and sell it today you would lose (98.00) from holding Recursion Pharmaceuticals or give up 14.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Recursion Pharmaceuticals vs. Affimed NV
Performance |
| Timeline |
| Recursion Pharmaceuticals |
| Affimed NV |
Recursion Pharmaceuticals and Affimed NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Recursion Pharmaceuticals and Affimed NV
The main advantage of trading using opposite Recursion Pharmaceuticals and Affimed NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recursion Pharmaceuticals position performs unexpectedly, Affimed NV 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 Affimed NV will offset losses from the drop in Affimed NV's long position.| Recursion Pharmaceuticals vs. Bright Minds Biosciences | Recursion Pharmaceuticals vs. HP Inc | Recursion Pharmaceuticals vs. Intel | Recursion Pharmaceuticals vs. Chevron Corp |
| Affimed NV vs. Bright Minds Biosciences | Affimed NV vs. HP Inc | Affimed NV vs. Intel | Affimed NV vs. Chevron Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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