Correlation Between Alpha Cognition and Fennec Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Alpha Cognition and Fennec Pharmaceuticals 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 Alpha Cognition and Fennec Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alpha Cognition and Fennec Pharmaceuticals

-0.01

Correlation Coefficient

Alpha Cognition  Fennec Pharmaceuticals

Good diversification

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

Pair Corralation between Alpha Cognition and Fennec Pharmaceuticals

Assuming the 90 days horizon Alpha Cognition is expected to generate 28.35 times more return on investment than Fennec Pharmaceuticals. However, Alpha Cognition is 28.35 times more volatile than Fennec Pharmaceuticals. It trades about 0.12 of its potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about 0.05 per unit of risk. If you would invest  1.64  in Alpha Cognition on September 2, 2024 and sell it today you would earn a total of  660.36  from holding Alpha Cognition or generate 40265.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Alpha Cognition  vs.  Fennec Pharmaceuticals

Alpha Cognition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Cognition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Alpha Cognition reported solid returns over the last few months and may actually be approaching a breakup point.

Fennec Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Fennec Pharmaceuticals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Cognition and Fennec Pharmaceuticals

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

The idea behind Alpha Cognition and Fennec Pharmaceuticals 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.