Correlation Between Rexel SA and Annovis BioInc

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

Diversification Opportunities for Rexel SA and Annovis BioInc

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Rexel and Annovis is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rexel SA and Annovis BioInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annovis BioInc and Rexel SA 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 Rexel SA are associated (or correlated) with Annovis BioInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annovis BioInc has no effect on the direction of Rexel SA i.e., Rexel SA and Annovis BioInc go up and down completely randomly.

Pair Corralation between Rexel SA and Annovis BioInc

Assuming the 90 days horizon Rexel SA is expected to generate 5.19 times less return on investment than Annovis BioInc. But when comparing it to its historical volatility, Rexel SA is 3.11 times less risky than Annovis BioInc. It trades about 0.03 of its potential returns per unit of risk. Annovis BioInc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  610.00  in Annovis BioInc on September 8, 2022 and sell it today you would earn a total of  576.00  from holding Annovis BioInc or generate 94.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Rexel SA  vs.  Annovis BioInc

 Performance (%) 
       Timeline  
Rexel SA 
Rexel Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Rexel SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Rexel SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Rexel Price Channel

Annovis BioInc 
Annovis Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Annovis BioInc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Annovis BioInc may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Annovis Price Channel

Rexel SA and Annovis BioInc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rexel SA and Annovis BioInc

The main advantage of trading using opposite Rexel SA and Annovis BioInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexel SA position performs unexpectedly, Annovis BioInc 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 Annovis BioInc will offset losses from the drop in Annovis BioInc's long position.
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The idea behind Rexel SA and Annovis BioInc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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