Correlation Between Abivax SA and OSE Pharma

Can any of the company-specific risk be diversified away by investing in both Abivax SA and OSE Pharma 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 Abivax SA and OSE Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Abivax SA and OSE Pharma

-0.01

Correlation Coefficient

Abivax SA  OSE Pharma

Good diversification

The 3 months correlation between Abivax and OSE is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Abivax SA and OSE Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSE Pharma SA and Abivax 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 Abivax SA are associated (or correlated) with OSE Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSE Pharma SA has no effect on the direction of Abivax SA i.e., Abivax SA and OSE Pharma go up and down completely randomly.

Pair Corralation between Abivax SA and OSE Pharma

Assuming the 90 days trading horizon Abivax SA is expected to under-perform the OSE Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Abivax SA is 1.41 times less risky than OSE Pharma. The stock trades about -0.36 of its potential returns per unit of risk. The OSE Pharma SA is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  926.00  in OSE Pharma SA on September 14, 2024 and sell it today you would lose (105.00) from holding OSE Pharma SA or give up 11.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Abivax SA  vs.  OSE Pharma SA

Abivax SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abivax SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

OSE Pharma SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OSE Pharma SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, OSE Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abivax SA and OSE Pharma

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

The idea behind Abivax SA and OSE Pharma SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.