Correlation Between Fennec Pharmaceuticals and MeiraGTx Holdings

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

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

Diversification Opportunities for Fennec Pharmaceuticals and MeiraGTx Holdings

-0.42

Correlation Coefficient

Fennec Pharmaceuticals  MeiraGTx Holdings

Very good diversification

The 3 months correlation between Fennec and MeiraGTx is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and MeiraGTx Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeiraGTx Holdings PLC 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 MeiraGTx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeiraGTx Holdings PLC has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and MeiraGTx Holdings go up and down completely randomly.

Pair Corralation between Fennec Pharmaceuticals and MeiraGTx Holdings

Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to under-perform the MeiraGTx Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Fennec Pharmaceuticals is 1.32 times less risky than MeiraGTx Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The MeiraGTx Holdings PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  612.00  in MeiraGTx Holdings PLC on August 31, 2024 and sell it today you would earn a total of  43.00  from holding MeiraGTx Holdings PLC or generate 7.03% return on investment over 90 days.

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

Fennec Pharmaceuticals  vs.  MeiraGTx Holdings PLC

Fennec Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 3 (%) 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.

MeiraGTx Holdings PLC

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MeiraGTx Holdings PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MeiraGTx Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fennec Pharmaceuticals and MeiraGTx Holdings

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

The idea behind Fennec Pharmaceuticals and MeiraGTx Holdings PLC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.