Correlation Between ANI Pharmaceuticals and Assertio Therapeutics

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

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

Diversification Opportunities for ANI Pharmaceuticals and Assertio Therapeutics

0.18

Correlation Coefficient

ANI Pharmaceuticals  Assertio Therapeutics

Average diversification

The 3 months correlation between ANI and Assertio is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and Assertio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assertio Therapeutics and ANI Pharmaceuticals 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 ANI Pharmaceuticals are associated (or correlated) with Assertio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assertio Therapeutics has no effect on the direction of ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Assertio Therapeutics go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and Assertio Therapeutics

Given the investment horizon of 90 days ANI Pharmaceuticals is expected to generate 0.55 times more return on investment than Assertio Therapeutics. However, ANI Pharmaceuticals is 1.8 times less risky than Assertio Therapeutics. It trades about -0.04 of its potential returns per unit of risk. Assertio Therapeutics is currently generating about -0.04 per unit of risk. If you would invest  6,294  in ANI Pharmaceuticals on September 4, 2024 and sell it today you would lose (507.00) from holding ANI Pharmaceuticals or give up 8.06% of portfolio value over 90 days.

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

ANI Pharmaceuticals  vs.  Assertio Therapeutics

ANI Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANI Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Assertio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assertio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ANI Pharmaceuticals and Assertio Therapeutics

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

The idea behind ANI Pharmaceuticals and Assertio 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.