Correlation Between Annexon and Simply Good

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

Diversification Opportunities for Annexon and Simply Good

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Annexon and Simply is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Annexon and The Simply Good in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simply Good and Annexon 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 Annexon are associated (or correlated) with Simply Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simply Good has no effect on the direction of Annexon i.e., Annexon and Simply Good go up and down completely randomly.

Pair Corralation between Annexon and Simply Good

Given the investment horizon of 90 days Annexon is expected to under-perform the Simply Good. In addition to that, Annexon is 2.3 times more volatile than The Simply Good. It trades about -0.03 of its total potential returns per unit of risk. The Simply Good is currently generating about 0.05 per unit of volatility. If you would invest  2,490  in The Simply Good on September 1, 2022 and sell it today you would earn a total of  1,313  from holding The Simply Good or generate 52.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Annexon  vs.  The Simply Good

 Performance (%) 
       Timeline  
Annexon 
Annexon Performance
0 of 100
Over the last 90 days Annexon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Annexon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Annexon Price Channel

Simply Good 
Simply Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in The Simply Good are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Simply Good revealed solid returns over the last few months and may actually be approaching a breakup point.

Simply Price Channel

Annexon and Simply Good Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Annexon and Simply Good

The main advantage of trading using opposite Annexon and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annexon position performs unexpectedly, Simply Good 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 Simply Good will offset losses from the drop in Simply Good's long position.
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The idea behind Annexon and The Simply Good 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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