Correlation Between Annexon and Stratis

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

Diversification Opportunities for Annexon and Stratis

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Annexon and Stratis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Annexon and Stratis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratis 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 Stratis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratis has no effect on the direction of Annexon i.e., Annexon and Stratis go up and down completely randomly.

Pair Corralation between Annexon and Stratis

Given the investment horizon of 90 days Annexon is expected to under-perform the Stratis. But the stock apears to be less risky and, when comparing its historical volatility, Annexon is 2.3 times less risky than Stratis. The stock trades about -0.03 of its potential returns per unit of risk. The Stratis is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Stratis on August 31, 2022 and sell it today you would lose (4.00)  from holding Stratis or give up 7.84% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.62%
ValuesDaily Returns

Annexon  vs.  Stratis

 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

Stratis 
Stratis Performance
0 of 100
Over the last 90 days Stratis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Stratis investors.

Stratis Price Channel

Annexon and Stratis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Annexon and Stratis

The main advantage of trading using opposite Annexon and Stratis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Annexon position performs unexpectedly, Stratis 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 Stratis will offset losses from the drop in Stratis' long position.
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The idea behind Annexon and Stratis 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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