Correlation Between Soleno Therapeutics and Annexon
Can any of the company-specific risk be diversified away by investing in both Soleno Therapeutics and Annexon 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 Soleno Therapeutics and Annexon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soleno Therapeutics and Annexon, you can compare the effects of market volatilities on Soleno Therapeutics and Annexon 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 Soleno Therapeutics with a short position of Annexon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soleno Therapeutics and Annexon.
Diversification Opportunities for Soleno Therapeutics and Annexon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Soleno and Annexon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Soleno Therapeutics and Annexon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexon and Soleno Therapeutics 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 Soleno Therapeutics are associated (or correlated) with Annexon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexon has no effect on the direction of Soleno Therapeutics i.e., Soleno Therapeutics and Annexon go up and down completely randomly.
Pair Corralation between Soleno Therapeutics and Annexon
Given the investment horizon of 90 days Soleno Therapeutics is expected to generate 1.14 times more return on investment than Annexon. However, Soleno Therapeutics is 1.14 times more volatile than Annexon. It trades about 0.13 of its potential returns per unit of risk. Annexon is currently generating about -0.41 per unit of risk. If you would invest 4,571 in Soleno Therapeutics on November 2, 2024 and sell it today you would earn a total of 413.00 from holding Soleno Therapeutics or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soleno Therapeutics vs. Annexon
Performance |
| Timeline |
| Soleno Therapeutics |
| Annexon |
Soleno Therapeutics and Annexon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soleno Therapeutics and Annexon
The main advantage of trading using opposite Soleno Therapeutics and Annexon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soleno Therapeutics position performs unexpectedly, Annexon 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 Annexon will offset losses from the drop in Annexon's long position.| Soleno Therapeutics vs. Annexon | Soleno Therapeutics vs. Bolt Biotherapeutics | Soleno Therapeutics vs. Lyra Therapeutics | Soleno Therapeutics vs. Pulmatrix |
| Annexon vs. Immix Biopharma | Annexon vs. Cns Pharmaceuticals | Annexon vs. Hepion Pharmaceuticals | Annexon vs. Day One Biopharmaceuticals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |