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

0.05

Correlation Coefficient

Enanta Pharmaceuticals  ANI Pharmaceuticals

Significant diversification

The 3 months correlation between Enanta and ANI is 0.05. 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 6.62 times less return on investment than ANI Pharmaceuticals. In addition to that, Enanta Pharmaceuticals is 2.57 times more volatile than ANI Pharmaceuticals. It trades about 0.0 of its total potential returns per unit of risk. ANI Pharmaceuticals is currently generating about 0.06 per unit of volatility. If you would invest  5,787  in ANI Pharmaceuticals on December 1, 2024 and sell it today you would earn a total of  402.00  from holding ANI Pharmaceuticals or generate 6.95% 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

Very Weak

Over the last 90 days Enanta Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. 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

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.