Correlation Between Annovis Bio and General Electric

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

Diversification Opportunities for Annovis Bio and General Electric

-0.61
  Correlation Coefficient

Excellent diversification

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

Pair Corralation between Annovis Bio and General Electric

Given the investment horizon of 90 days Annovis Bio is expected to generate 4.89 times more return on investment than General Electric. However, Annovis Bio is 4.89 times more volatile than General Electric. It trades about 0.02 of its potential returns per unit of risk. General Electric is currently generating about -0.04 per unit of risk. If you would invest  2,155  in Annovis Bio on May 11, 2022 and sell it today you would lose (1,024)  from holding Annovis Bio or give up 47.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Annovis Bio  vs.  General Electric

 Performance (%) 
       Timeline  
Annovis Bio 
Annovis Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Annovis Bio are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Annovis Bio reported solid returns over the last few months and may actually be approaching a breakup point.

Annovis Price Channel

General Electric 
General Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Electric are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, General Electric is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

General Price Channel

Annovis Bio and General Electric Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Annovis Bio and General Electric

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

Annovis Bio

Pair trading matchups for Annovis Bio

The idea behind Annovis Bio and General Electric 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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