Correlation Between FTSE EM and Annovis Bio

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

Diversification Opportunities for FTSE EM and Annovis Bio

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between FTSE EM and Annovis is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding FTSE EM ETF and Annovis Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annovis Bio and FTSE EM 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 FTSE EM ETF are associated (or correlated) with Annovis Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annovis Bio has no effect on the direction of FTSE EM i.e., FTSE EM and Annovis Bio go up and down completely randomly.

Pair Corralation between FTSE EM and Annovis Bio

Considering the 90-day investment horizon FTSE EM ETF is expected to generate 0.28 times more return on investment than Annovis Bio. However, FTSE EM ETF is 3.56 times less risky than Annovis Bio. It trades about -0.06 of its potential returns per unit of risk. Annovis Bio is currently generating about -0.19 per unit of risk. If you would invest  4,313  in FTSE EM ETF on February 22, 2022 and sell it today you would lose (95.00)  from holding FTSE EM ETF or give up 2.2% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

FTSE EM ETF  vs.  Annovis Bio

 Performance (%) 
      Timeline 
FTSE EM ETF 
FTSE EM Performance
0 of 100
Over the last 90 days FTSE EM ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's basic indicators remain quite persistent which may send shares a bit higher in June 2022. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

FTSE EM Price Channel

Annovis Bio 
Annovis Performance
0 of 100
Over the last 90 days Annovis Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Annovis Price Channel

FTSE EM and Annovis Bio Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with FTSE EM and Annovis Bio

The main advantage of trading using opposite FTSE EM and Annovis Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTSE EM position performs unexpectedly, Annovis Bio 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 Bio will offset losses from the drop in Annovis Bio's long position.
The idea behind FTSE EM ETF and Annovis Bio 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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