Correlation Between Fennec Pharmaceuticals and Avax Techs

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

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

Diversification Opportunities for Fennec Pharmaceuticals and Avax Techs

0.0

Correlation Coefficient

Fennec Pharmaceuticals  Avax Techs

Pay attention - limited upside

The 3 months correlation between Fennec and Avax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Avax Techs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avax Techs 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 Avax Techs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avax Techs has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Avax Techs go up and down completely randomly.

Pair Corralation between Fennec Pharmaceuticals and Avax Techs

Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 0.75 times more return on investment than Avax Techs. However, Fennec Pharmaceuticals is 1.34 times less risky than Avax Techs. It trades about 0.01 of its potential returns per unit of risk. Avax Techs is currently generating about -0.04 per unit of risk. If you would invest  826.00  in Fennec Pharmaceuticals on December 2, 2024 and sell it today you would lose (124.00) from holding Fennec Pharmaceuticals or give up 15.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Fennec Pharmaceuticals  vs.  Avax Techs

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.

Avax Techs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avax Techs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Avax Techs is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fennec Pharmaceuticals and Avax Techs

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

The idea behind Fennec Pharmaceuticals and Avax Techs 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.