Correlation Between Allena Pharmaceuticals and FBR ASSET

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Can any of the company-specific risk be diversified away by investing in both Allena Pharmaceuticals and FBR ASSET 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 Allena Pharmaceuticals and FBR ASSET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allena Pharmaceuticals and FBR ASSET INVESTMENT, you can compare the effects of market volatilities on Allena Pharmaceuticals and FBR ASSET 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 Allena Pharmaceuticals with a short position of FBR ASSET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allena Pharmaceuticals and FBR ASSET.

Diversification Opportunities for Allena Pharmaceuticals and FBR ASSET

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Allena and FBR ASSET is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Allena Pharmaceuticals and FBR ASSET INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FBR ASSET INVESTMENT and Allena 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 Allena Pharmaceuticals are associated (or correlated) with FBR ASSET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FBR ASSET INVESTMENT has no effect on the direction of Allena Pharmaceuticals i.e., Allena Pharmaceuticals and FBR ASSET go up and down completely randomly.

Pair Corralation between Allena Pharmaceuticals and FBR ASSET

If you would invest  12.00  in Allena Pharmaceuticals on May 21, 2022 and sell it today you would lose (1.00)  from holding Allena Pharmaceuticals or give up 8.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.61%
ValuesDaily Returns

Allena Pharmaceuticals  vs.  FBR ASSET INVESTMENT

 Performance (%) 
       Timeline  
Allena Pharmaceuticals 
Allena Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Allena Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Allena Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Allena Price Channel

FBR ASSET INVESTMENT 
FBR ASSET Performance
0 of 100
Over the last 90 days FBR ASSET INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, FBR ASSET is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Allena Pharmaceuticals and FBR ASSET Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allena Pharmaceuticals and FBR ASSET

The main advantage of trading using opposite Allena Pharmaceuticals and FBR ASSET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allena Pharmaceuticals position performs unexpectedly, FBR ASSET 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 FBR ASSET will offset losses from the drop in FBR ASSET's long position.

Allena Pharmaceuticals

Pair trading matchups for Allena Pharmaceuticals

The idea behind Allena Pharmaceuticals and FBR ASSET INVESTMENT 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.

FBR ASSET INVESTMENT

Pair trading matchups for FBR ASSET

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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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