Correlation Between DeNA and Abeona Therapeutics

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

Diversification Opportunities for DeNA and Abeona Therapeutics

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between DeNA and Abeona is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding DeNA Co and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and DeNA 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 DeNA Co are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of DeNA i.e., DeNA and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between DeNA and Abeona Therapeutics

Assuming the 90 days horizon DeNA is expected to generate 3.78 times less return on investment than Abeona Therapeutics. But when comparing it to its historical volatility, DeNA Co is 13.75 times less risky than Abeona Therapeutics. It trades about 0.21 of its potential returns per unit of risk. Abeona Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  387.00  in Abeona Therapeutics on September 4, 2022 and sell it today you would earn a total of  12.00  from holding Abeona Therapeutics or generate 3.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DeNA Co  vs.  Abeona Therapeutics

 Performance (%) 
       Timeline  
DeNA 
DeNA Performance
0 of 100
Over the last 90 days DeNA Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

DeNA Price Channel

Abeona Therapeutics 
Abeona Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 3 (%) 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

DeNA and Abeona Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DeNA and Abeona Therapeutics

The main advantage of trading using opposite DeNA and Abeona Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeNA position performs unexpectedly, Abeona Therapeutics 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 Abeona Therapeutics will offset losses from the drop in Abeona Therapeutics' long position.
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The idea behind DeNA Co and Abeona Therapeutics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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