Correlation Between Enanta Pharmaceuticals and ANI Pharmaceuticals

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

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

Diversification Opportunities for Enanta Pharmaceuticals and ANI Pharmaceuticals

0.12

Correlation Coefficient

Enanta Pharmaceuticals  ANI Pharmaceuticals

Average diversification

The 3 months correlation between Enanta and ANI is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Enanta Pharmaceuticals and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals and Enanta 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 Enanta Pharmaceuticals are associated (or correlated) with ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Enanta Pharmaceuticals i.e., Enanta Pharmaceuticals and ANI Pharmaceuticals go up and down completely randomly.

Pair Corralation between Enanta Pharmaceuticals and ANI Pharmaceuticals

Given the investment horizon of 90 days Enanta Pharmaceuticals is expected to generate 4.41 times less return on investment than ANI Pharmaceuticals. In addition to that, Enanta Pharmaceuticals is 2.14 times more volatile than ANI Pharmaceuticals. It trades about 0.02 of its total potential returns per unit of risk. ANI Pharmaceuticals is currently generating about 0.16 per unit of volatility. If you would invest  5,441  in ANI Pharmaceuticals on December 27, 2024 and sell it today you would earn a total of  1,395  from holding ANI Pharmaceuticals or generate 25.64% return on investment over 90 days.

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

Enanta Pharmaceuticals  vs.  ANI Pharmaceuticals

Enanta Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enanta Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Enanta Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ANI Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enanta Pharmaceuticals and ANI Pharmaceuticals

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

The idea behind Enanta Pharmaceuticals and ANI 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.