Correlation Between Adagene and Marizyme

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

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

Diversification Opportunities for Adagene and Marizyme

0.12

Correlation Coefficient

Adagene  Marizyme

Average diversification

The 3 months correlation between Adagene and Marizyme is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Marizyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marizyme 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 Marizyme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marizyme has no effect on the direction of Adagene i.e., Adagene and Marizyme go up and down completely randomly.

Pair Corralation between Adagene and Marizyme

Given the investment horizon of 90 days Adagene is expected to under-perform the Marizyme. But the stock apears to be less risky and, when comparing its historical volatility, Adagene is 37.22 times less risky than Marizyme. The stock trades about -0.1 of its potential returns per unit of risk. The Marizyme is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.82  in Marizyme on December 29, 2024 and sell it today you would lose (0.01) from holding Marizyme or give up 1.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Adagene  vs.  Marizyme

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marizyme

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marizyme are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Marizyme displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adagene and Marizyme

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

The idea behind Adagene and Marizyme 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.