Correlation Between Altimmune and Amerisourcebergen

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

Diversification Opportunities for Altimmune and Amerisourcebergen

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Altimmune and Amerisourcebergen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Altimmune and Amerisourcebergen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerisourcebergen Corp and Altimmune 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 Altimmune are associated (or correlated) with Amerisourcebergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerisourcebergen Corp has no effect on the direction of Altimmune i.e., Altimmune and Amerisourcebergen go up and down completely randomly.

Pair Corralation between Altimmune and Amerisourcebergen

Considering the 90-day investment horizon Altimmune is expected to generate 5.21 times more return on investment than Amerisourcebergen. However, Altimmune is 5.21 times more volatile than Amerisourcebergen Corp. It trades about 0.03 of its potential returns per unit of risk. Amerisourcebergen Corp is currently generating about -0.11 per unit of risk. If you would invest  1,201  in Altimmune on June 29, 2022 and sell it today you would lose (28.00)  from holding Altimmune or give up 2.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Altimmune  vs.  Amerisourcebergen Corp

 Performance (%) 
       Timeline  
Altimmune 
Altimmune Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Altimmune are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Altimmune unveiled solid returns over the last few months and may actually be approaching a breakup point.

Altimmune Price Channel

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

Amerisourcebergen Price Channel

Altimmune and Amerisourcebergen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altimmune and Amerisourcebergen

The main advantage of trading using opposite Altimmune and Amerisourcebergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altimmune position performs unexpectedly, Amerisourcebergen 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 Amerisourcebergen will offset losses from the drop in Amerisourcebergen's long position.
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The idea behind Altimmune and Amerisourcebergen Corp 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.
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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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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