Correlation Between Fennec Pharmaceuticals and Ocular Therapeutix
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals and Ocular Therapeutix 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 Ocular Therapeutix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fennec Pharmaceuticals and Ocular Therapeutix, you can compare the effects of market volatilities on Fennec Pharmaceuticals and Ocular Therapeutix 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 Ocular Therapeutix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Ocular Therapeutix.
Diversification Opportunities for Fennec Pharmaceuticals and Ocular Therapeutix
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fennec and Ocular is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Ocular Therapeutix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocular Therapeutix 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 Ocular Therapeutix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocular Therapeutix has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Ocular Therapeutix go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and Ocular Therapeutix
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 0.66 times more return on investment than Ocular Therapeutix. However, Fennec Pharmaceuticals is 1.5 times less risky than Ocular Therapeutix. It trades about 0.04 of its potential returns per unit of risk. Ocular Therapeutix is currently generating about -0.01 per unit of risk. If you would invest 616.00 in Fennec Pharmaceuticals on December 28, 2024 and sell it today you would earn a total of 30.00 from holding Fennec Pharmaceuticals or generate 4.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fennec Pharmaceuticals vs. Ocular Therapeutix
Performance |
Timeline |
Fennec Pharmaceuticals |
Ocular Therapeutix |
Fennec Pharmaceuticals and Ocular Therapeutix Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fennec Pharmaceuticals and Ocular Therapeutix
The main advantage of trading using opposite Fennec Pharmaceuticals and Ocular Therapeutix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals position performs unexpectedly, Ocular Therapeutix 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 Ocular Therapeutix will offset losses from the drop in Ocular Therapeutix's long position.Fennec Pharmaceuticals vs. Molecular Partners AG | Fennec Pharmaceuticals vs. MediciNova | Fennec Pharmaceuticals vs. Anebulo Pharmaceuticals | Fennec Pharmaceuticals vs. Champions Oncology |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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