Correlation Between Abeona Therapeutics and Evofem Biosciences

Can any of the company-specific risk be diversified away by investing in both Abeona Therapeutics and Evofem Biosciences 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 Abeona Therapeutics and Evofem Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abeona Therapeutics and Evofem Biosciences, you can compare the effects of market volatilities on Abeona Therapeutics and Evofem Biosciences 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 Abeona Therapeutics with a short position of Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abeona Therapeutics and Evofem Biosciences.

Diversification Opportunities for Abeona Therapeutics and Evofem Biosciences

-0.69

Correlation Coefficient

Abeona Therapeutics  Evofem Biosciences

Excellent diversification

The 3 months correlation between Abeona and Evofem is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Abeona Therapeutics and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences and Abeona Therapeutics 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 Abeona Therapeutics are associated (or correlated) with Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Abeona Therapeutics i.e., Abeona Therapeutics and Evofem Biosciences go up and down completely randomly.

Pair Corralation between Abeona Therapeutics and Evofem Biosciences

If you would invest  546.00  in Abeona Therapeutics on September 2, 2024 and sell it today you would earn a total of  93.00  from holding Abeona Therapeutics or generate 17.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Abeona Therapeutics  vs.  Evofem Biosciences

Abeona Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Abeona Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Evofem Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evofem Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Evofem Biosciences is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Abeona Therapeutics and Evofem Biosciences

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

The idea behind Abeona Therapeutics and Evofem Biosciences 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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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 the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.