Correlation Between Affimed NV and Evofem Biosciences

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

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

Diversification Opportunities for Affimed NV and Evofem Biosciences

0.66

Correlation Coefficient

Affimed NV  Evofem Biosciences

Poor diversification

The 3 months correlation between Affimed and Evofem is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Affimed NV and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences and Affimed NV 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 Affimed NV 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 Affimed NV i.e., Affimed NV and Evofem Biosciences go up and down completely randomly.

Pair Corralation between Affimed NV and Evofem Biosciences

If you would invest  64.00  in Evofem Biosciences on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Evofem Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Affimed NV  vs.  Evofem Biosciences

Affimed NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affimed NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Affimed NV and Evofem Biosciences

The main advantage of trading using opposite Affimed NV and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affimed NV 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 Affimed NV 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.