Correlation Between Ainos and AbbVie

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

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

Diversification Opportunities for Ainos and AbbVie

-0.02

Correlation Coefficient

Ainos  AbbVie

Good diversification

The 3 months correlation between Ainos and AbbVie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ainos Inc and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie Inc and Ainos 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 Ainos Inc are associated (or correlated) with AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of Ainos i.e., Ainos and AbbVie go up and down completely randomly.

Pair Corralation between Ainos and AbbVie

Given the investment horizon of 90 days Ainos Inc is expected to generate 16.85 times more return on investment than AbbVie. However, Ainos is 16.85 times more volatile than AbbVie Inc. It trades about 0.21 of its potential returns per unit of risk. AbbVie Inc is currently generating about -0.28 per unit of risk. If you would invest  47.00  in Ainos Inc on October 25, 2024 and sell it today you would earn a total of  26.00  from holding Ainos Inc or generate 55.32% return on investment over 90 days.

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

Ainos Inc  vs.  AbbVie Inc

Ainos Inc

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ainos Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Ainos exhibited solid returns over the last few months and may actually be approaching a breakup point.

AbbVie Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AbbVie Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's fundamental drivers remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Ainos and AbbVie

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

The idea behind Ainos Inc and AbbVie Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.