Correlation Between Fennec Pharmaceuticals and Ascletis Pharma

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

By analyzing existing cross correlation between Fennec Pharmaceuticals and Ascletis Pharma, you can compare the effects of market volatilities on Fennec Pharmaceuticals and Ascletis Pharma 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 Ascletis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Ascletis Pharma.

Diversification Opportunities for Fennec Pharmaceuticals and Ascletis Pharma

0.51

Correlation Coefficient

Fennec Pharmaceuticals  Ascletis Pharma

Very weak diversification

The 3 months correlation between Fennec and Ascletis is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Ascletis Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascletis Pharma 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 Ascletis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascletis Pharma has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Ascletis Pharma go up and down completely randomly.

Pair Corralation between Fennec Pharmaceuticals and Ascletis Pharma

Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 13.99 times less return on investment than Ascletis Pharma. But when comparing it to its historical volatility, Fennec Pharmaceuticals is 2.71 times less risky than Ascletis Pharma. It trades about 0.01 of its potential returns per unit of risk. Ascletis Pharma is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Ascletis Pharma on December 2, 2024 and sell it today you would earn a total of  22.00  from holding Ascletis Pharma or generate 35.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.0%
Values	Daily Returns

Fennec Pharmaceuticals  vs.  Ascletis Pharma

Fennec Pharmaceuticals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 7 (%) 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.

Ascletis Pharma

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ascletis Pharma are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Ascletis Pharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fennec Pharmaceuticals and Ascletis Pharma

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

The idea behind Fennec Pharmaceuticals and Ascletis Pharma 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.