Correlation Between Adagene and ABIO Old

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

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

Diversification Opportunities for Adagene and ABIO Old

0.0

Correlation Coefficient

Adagene  ABIO Old

Pay attention - limited upside

The 3 months correlation between Adagene and ABIO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and ABIO Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIO Old and Adagene 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 Adagene are associated (or correlated) with ABIO Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIO Old has no effect on the direction of Adagene i.e., Adagene and ABIO Old go up and down completely randomly.

Pair Corralation between Adagene and ABIO Old

If you would invest (100.00) in ABIO Old on December 20, 2024 and sell it today you would earn a total of  100.00  from holding ABIO Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Adagene  vs.  ABIO Old

Adagene

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adagene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ABIO Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days ABIO Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, ABIO Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Adagene and ABIO Old

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

The idea behind Adagene and ABIO Old 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.