Correlation Between Abeona Therapeutics and Anavex Lf

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

Diversification Opportunities for Abeona Therapeutics and Anavex Lf

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Abeona and Anavex is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Abeona Therapeutics and Anavex Lf SC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anavex Lf SC and Abeona 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 Abeona Therapeutics are associated (or correlated) with Anavex Lf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anavex Lf SC has no effect on the direction of Abeona Therapeutics i.e., Abeona Therapeutics and Anavex Lf go up and down completely randomly.

Pair Corralation between Abeona Therapeutics and Anavex Lf

Given the investment horizon of 90 days Abeona Therapeutics is expected to generate 1.24 times more return on investment than Anavex Lf. However, Abeona Therapeutics is 1.24 times more volatile than Anavex Lf SC. It trades about 0.07 of its potential returns per unit of risk. Anavex Lf SC is currently generating about 0.07 per unit of risk. If you would invest  390.00  in Abeona Therapeutics on May 20, 2022 and sell it today you would earn a total of  70.00  from holding Abeona Therapeutics or generate 17.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Abeona Therapeutics  vs.  Anavex Lf SC

 Performance (%) 
       Timeline  
Abeona Therapeutics 
Abeona Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Abeona Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Abeona Price Channel

Anavex Lf SC 
Anavex Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Anavex Lf SC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, Anavex Lf revealed solid returns over the last few months and may actually be approaching a breakup point.

Anavex Price Channel

Abeona Therapeutics and Anavex Lf Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abeona Therapeutics and Anavex Lf

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

Abeona Therapeutics

Pair trading matchups for Abeona Therapeutics

The idea behind Abeona Therapeutics and Anavex Lf SC 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.
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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