Correlation Between ANI Pharmaceuticals and OptiNose

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

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

Diversification Opportunities for ANI Pharmaceuticals and OptiNose

0.43

Correlation Coefficient

ANI Pharmaceuticals  OptiNose

Very weak diversification

The 3 months correlation between ANI and OptiNose is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose 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 OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of ANI Pharmaceuticals i.e., ANI Pharmaceuticals and OptiNose go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and OptiNose

Given the investment horizon of 90 days ANI Pharmaceuticals is expected to generate 0.48 times more return on investment than OptiNose. However, ANI Pharmaceuticals is 2.06 times less risky than OptiNose. It trades about 0.04 of its potential returns per unit of risk. OptiNose is currently generating about -0.26 per unit of risk. If you would invest  5,835  in ANI Pharmaceuticals on November 19, 2024 and sell it today you would earn a total of  57.00  from holding ANI Pharmaceuticals or generate 0.98% return on investment over 90 days.

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

ANI Pharmaceuticals  vs.  OptiNose

ANI Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in March 2025.

OptiNose

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OptiNose are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, OptiNose displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANI Pharmaceuticals and OptiNose

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

The idea behind ANI Pharmaceuticals and OptiNose 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.