Correlation Between Fortress Biotech and Pieris Pharmaceuticals

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

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

Diversification Opportunities for Fortress Biotech and Pieris Pharmaceuticals

-0.6

Correlation Coefficient

Fortress Biotech  Pieris Pharmaceuticals

Excellent diversification

The 3 months correlation between Fortress and Pieris is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech and Pieris Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pieris Pharmaceuticals and Fortress Biotech 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 Fortress Biotech are associated (or correlated) with Pieris Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pieris Pharmaceuticals has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Pieris Pharmaceuticals go up and down completely randomly.

Pair Corralation between Fortress Biotech and Pieris Pharmaceuticals

Given the investment horizon of 90 days Fortress Biotech is expected to under-perform the Pieris Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech is 1.12 times less risky than Pieris Pharmaceuticals. The stock trades about -0.03 of its potential returns per unit of risk. The Pieris Pharmaceuticals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  10,000  in Pieris Pharmaceuticals on October 7, 2024 and sell it today you would lose (8,640) from holding Pieris Pharmaceuticals or give up 86.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.38%
Values	Daily Returns

Fortress Biotech  vs.  Pieris Pharmaceuticals

Fortress Biotech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Biotech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Fortress Biotech displayed solid returns over the last few months and may actually be approaching a breakup point.

Pieris Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pieris Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Fortress Biotech and Pieris Pharmaceuticals

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

The idea behind Fortress Biotech and Pieris 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.