Correlation Between Altimmune and Anavex Life

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

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

Diversification Opportunities for Altimmune and Anavex Life

0.84

Correlation Coefficient

Altimmune  Anavex Life

Very poor diversification

The 3 months correlation between Altimmune and Anavex is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Altimmune and Anavex Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anavex Life Sciences and Altimmune 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 Altimmune are associated (or correlated) with Anavex Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anavex Life Sciences has no effect on the direction of Altimmune i.e., Altimmune and Anavex Life go up and down completely randomly.

Pair Corralation between Altimmune and Anavex Life

Considering the 90-day investment horizon Altimmune is expected to under-perform the Anavex Life. But the stock apears to be less risky and, when comparing its historical volatility, Altimmune is 1.05 times less risky than Anavex Life. The stock trades about -0.03 of its potential returns per unit of risk. The Anavex Life Sciences is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  911.00  in Anavex Life Sciences on September 23, 2024 and sell it today you would lose (48.00) from holding Anavex Life Sciences or give up 5.27% of portfolio value over 90 days.

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

Altimmune  vs.  Anavex Life Sciences

Altimmune

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altimmune are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Altimmune unveiled solid returns over the last few months and may actually be approaching a breakup point.

Anavex Life Sciences

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anavex Life Sciences are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Anavex Life disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altimmune and Anavex Life

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

The idea behind Altimmune and Anavex Life Sciences 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.