Correlation Between Fennec Pharmaceuticals and Aptorum Group

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

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

Diversification Opportunities for Fennec Pharmaceuticals and Aptorum Group

-0.37

Correlation Coefficient

Fennec Pharmaceuticals  Aptorum Group

Very good diversification

The 3 months correlation between Fennec and Aptorum is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Aptorum Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptorum Group and Fennec 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 Fennec Pharmaceuticals are associated (or correlated) with Aptorum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptorum Group has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Aptorum Group go up and down completely randomly.

Pair Corralation between Fennec Pharmaceuticals and Aptorum Group

Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 2.48 times less return on investment than Aptorum Group. But when comparing it to its historical volatility, Fennec Pharmaceuticals is 3.8 times less risky than Aptorum Group. It trades about 0.13 of its potential returns per unit of risk. Aptorum Group Ltd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Aptorum Group Ltd on October 8, 2024 and sell it today you would earn a total of  44.00  from holding Aptorum Group Ltd or generate 25.88% return on investment over 90 days.

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

Fennec Pharmaceuticals  vs.  Aptorum Group Ltd

Fennec Pharmaceuticals

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Fennec Pharmaceuticals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aptorum Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptorum Group Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptorum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fennec Pharmaceuticals and Aptorum Group

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

The idea behind Fennec Pharmaceuticals and Aptorum Group Ltd 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.