Correlation Between Atea Pharmaceuticals and Abeona Therapeutics

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

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

Diversification Opportunities for Atea Pharmaceuticals and Abeona Therapeutics

-0.4

Correlation Coefficient

Atea Pharmaceuticals  Abeona Therapeutics

Very good diversification

The 3 months correlation between Atea and Abeona is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Atea Pharmaceuticals and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and Atea 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 Atea Pharmaceuticals are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of Atea Pharmaceuticals i.e., Atea Pharmaceuticals and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between Atea Pharmaceuticals and Abeona Therapeutics

Given the investment horizon of 90 days Atea Pharmaceuticals is expected to under-perform the Abeona Therapeutics. In addition to that, Atea Pharmaceuticals is 1.03 times more volatile than Abeona Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Abeona Therapeutics is currently generating about 0.11 per unit of volatility. If you would invest  546.00  in Abeona Therapeutics on September 2, 2024 and sell it today you would earn a total of  93.00  from holding Abeona Therapeutics or generate 17.03% return on investment over 90 days.

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

Atea Pharmaceuticals  vs.  Abeona Therapeutics

Atea Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Abeona Therapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Abeona Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atea Pharmaceuticals and Abeona Therapeutics

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

The idea behind Atea Pharmaceuticals and Abeona 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.