Correlation Between Annexin Pharmaceuticals and IZafe Group

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

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

Diversification Opportunities for Annexin Pharmaceuticals and IZafe Group

-0.74

Correlation Coefficient

Annexin Pharmaceuticals  IZafe Group

Pay attention - limited upside

The 3 months correlation between Annexin and IZafe is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Annexin Pharmaceuticals AB and iZafe Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iZafe Group AB and Annexin 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 Annexin Pharmaceuticals AB are associated (or correlated) with IZafe Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iZafe Group AB has no effect on the direction of Annexin Pharmaceuticals i.e., Annexin Pharmaceuticals and IZafe Group go up and down completely randomly.

Pair Corralation between Annexin Pharmaceuticals and IZafe Group

Assuming the 90 days trading horizon Annexin Pharmaceuticals AB is expected to under-perform the IZafe Group. In addition to that, Annexin Pharmaceuticals is 1.21 times more volatile than iZafe Group AB. It trades about -0.03 of its total potential returns per unit of risk. iZafe Group AB is currently generating about 0.07 per unit of volatility. If you would invest  21.00  in iZafe Group AB on December 29, 2024 and sell it today you would earn a total of  3.00  from holding iZafe Group AB or generate 14.29% return on investment over 90 days.

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

Annexin Pharmaceuticals AB  vs.  iZafe Group AB

Annexin Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Annexin Pharmaceuticals AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

iZafe Group AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iZafe Group AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, IZafe Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Annexin Pharmaceuticals and IZafe Group

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

The idea behind Annexin Pharmaceuticals AB and iZafe Group AB 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.