Correlation Between EnGene Holdings and Eupraxia Pharmaceuticals

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

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

Diversification Opportunities for EnGene Holdings and Eupraxia Pharmaceuticals

-0.18

Correlation Coefficient

EnGene Holdings  Eupraxia Pharmaceuticals

Good diversification

The 3 months correlation between EnGene and Eupraxia is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding enGene Holdings Common and Eupraxia Pharmaceuticals Commo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eupraxia Pharmaceuticals and EnGene Holdings 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 enGene Holdings Common are associated (or correlated) with Eupraxia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eupraxia Pharmaceuticals has no effect on the direction of EnGene Holdings i.e., EnGene Holdings and Eupraxia Pharmaceuticals go up and down completely randomly.

Pair Corralation between EnGene Holdings and Eupraxia Pharmaceuticals

Given the investment horizon of 90 days enGene Holdings Common is expected to generate 2.13 times more return on investment than Eupraxia Pharmaceuticals. However, EnGene Holdings is 2.13 times more volatile than Eupraxia Pharmaceuticals Common. It trades about 0.03 of its potential returns per unit of risk. Eupraxia Pharmaceuticals Common is currently generating about 0.03 per unit of risk. If you would invest  1,033  in enGene Holdings Common on October 5, 2024 and sell it today you would lose (339.00) from holding enGene Holdings Common or give up 32.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	37.98%
Values	Daily Returns

enGene Holdings Common  vs.  Eupraxia Pharmaceuticals Commo

enGene Holdings Common

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, EnGene Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Eupraxia Pharmaceuticals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eupraxia Pharmaceuticals Common are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Eupraxia Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EnGene Holdings and Eupraxia Pharmaceuticals

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

The idea behind enGene Holdings Common and Eupraxia Pharmaceuticals Common 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.