Correlation Between Akari Therapeutics and ABVC Biopharma

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

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

Diversification Opportunities for Akari Therapeutics and ABVC Biopharma

0.35

Correlation Coefficient

Akari Therapeutics  ABVC Biopharma

Weak diversification

The 3 months correlation between Akari and ABVC is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Akari Therapeutics PLC and ABVC Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABVC Biopharma and Akari Therapeutics 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 Akari Therapeutics PLC are associated (or correlated) with ABVC Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABVC Biopharma has no effect on the direction of Akari Therapeutics i.e., Akari Therapeutics and ABVC Biopharma go up and down completely randomly.

Pair Corralation between Akari Therapeutics and ABVC Biopharma

Given the investment horizon of 90 days Akari Therapeutics PLC is expected to generate 0.81 times more return on investment than ABVC Biopharma. However, Akari Therapeutics PLC is 1.23 times less risky than ABVC Biopharma. It trades about -0.03 of its potential returns per unit of risk. ABVC Biopharma is currently generating about -0.03 per unit of risk. If you would invest  1,020  in Akari Therapeutics PLC on October 10, 2024 and sell it today you would lose (879.00) from holding Akari Therapeutics PLC or give up 86.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Akari Therapeutics PLC  vs.  ABVC Biopharma

Akari Therapeutics PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akari Therapeutics PLC 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 basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ABVC Biopharma

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Akari Therapeutics and ABVC Biopharma

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

The idea behind Akari Therapeutics PLC and ABVC Biopharma 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.