Correlation Between Champions Oncology and Fennec Pharmaceuticals

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

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

Diversification Opportunities for Champions Oncology and Fennec Pharmaceuticals

0.33

Correlation Coefficient

Champions Oncology  Fennec Pharmaceuticals

Weak diversification

The 3 months correlation between Champions and Fennec is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Champions Oncology and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals and Champions Oncology 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 Champions Oncology are associated (or correlated) with Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Champions Oncology i.e., Champions Oncology and Fennec Pharmaceuticals go up and down completely randomly.

Pair Corralation between Champions Oncology and Fennec Pharmaceuticals

Given the investment horizon of 90 days Champions Oncology is expected to generate 2.03 times more return on investment than Fennec Pharmaceuticals. However, Champions Oncology is 2.03 times more volatile than Fennec Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about 0.05 per unit of risk. If you would invest  862.00  in Champions Oncology on December 30, 2024 and sell it today you would earn a total of  49.00  from holding Champions Oncology or generate 5.68% return on investment over 90 days.

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

Champions Oncology  vs.  Fennec Pharmaceuticals

Champions Oncology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Champions Oncology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental drivers, Champions Oncology reported solid returns over the last few months and may actually be approaching a breakup point.

Fennec Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Fennec Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Champions Oncology and Fennec Pharmaceuticals

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

The idea behind Champions Oncology and Fennec Pharmaceuticals 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.