Correlation Between Elixinol Global and Antisense Therapeutics

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

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

Diversification Opportunities for Elixinol Global and Antisense Therapeutics

-0.64

Correlation Coefficient

Elixinol Global  Antisense Therapeutics

Excellent diversification

The 3 months correlation between Elixinol and Antisense is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elixinol Global and Antisense Therapeutics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antisense Therapeutics and Elixinol Global 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 Elixinol Global are associated (or correlated) with Antisense Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antisense Therapeutics has no effect on the direction of Elixinol Global i.e., Elixinol Global and Antisense Therapeutics go up and down completely randomly.

Pair Corralation between Elixinol Global and Antisense Therapeutics

Assuming the 90 days horizon Elixinol Global is expected to generate 4.07 times more return on investment than Antisense Therapeutics. However, Elixinol Global is 4.07 times more volatile than Antisense Therapeutics Limited. It trades about 0.12 of its potential returns per unit of risk. Antisense Therapeutics Limited is currently generating about 0.03 per unit of risk. If you would invest  1.66  in Elixinol Global on October 21, 2024 and sell it today you would earn a total of  0.47  from holding Elixinol Global or generate 28.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.99%
Values	Daily Returns

Elixinol Global  vs.  Antisense Therapeutics Limited

Elixinol Global

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Elixinol Global are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Elixinol Global reported solid returns over the last few months and may actually be approaching a breakup point.

Antisense Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antisense Therapeutics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Elixinol Global and Antisense Therapeutics

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

The idea behind Elixinol Global and Antisense Therapeutics Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.