Correlation Between Angion Biomedica and Effector Therapeutics

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

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

Diversification Opportunities for Angion Biomedica and Effector Therapeutics

0.0

Correlation Coefficient

Angion Biomedica  Effector Therapeutics

Pay attention - limited upside

The 3 months correlation between Angion and Effector is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Angion Biomedica Corp and Effector Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Effector Therapeutics and Angion Biomedica 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 Angion Biomedica Corp are associated (or correlated) with Effector Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Effector Therapeutics has no effect on the direction of Angion Biomedica i.e., Angion Biomedica and Effector Therapeutics go up and down completely randomly.

Pair Corralation between Angion Biomedica and Effector Therapeutics

If you would invest (100.00) in Effector Therapeutics on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Effector Therapeutics or generate -100.0% return on investment over 90 days.

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

Angion Biomedica Corp  vs.  Effector Therapeutics

Angion Biomedica Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Angion Biomedica Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Angion Biomedica is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Effector Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Effector Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Effector Therapeutics is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Angion Biomedica and Effector Therapeutics

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

The idea behind Angion Biomedica Corp and Effector Therapeutics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.