Correlation Between Fennec Pharmaceuticals and PolyPid

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

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

Diversification Opportunities for Fennec Pharmaceuticals and PolyPid

-0.68

Correlation Coefficient

Fennec Pharmaceuticals  PolyPid

Excellent diversification

The 3 months correlation between Fennec and PolyPid is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and PolyPid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPid 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 PolyPid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPid has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and PolyPid go up and down completely randomly.

Pair Corralation between Fennec Pharmaceuticals and PolyPid

Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 0.61 times more return on investment than PolyPid. However, Fennec Pharmaceuticals is 1.64 times less risky than PolyPid. It trades about -0.01 of its potential returns per unit of risk. PolyPid is currently generating about -0.04 per unit of risk. If you would invest  1,003  in Fennec Pharmaceuticals on September 22, 2024 and sell it today you would lose (419.00) from holding Fennec Pharmaceuticals or give up 41.77% of portfolio value over 90 days.

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

Fennec Pharmaceuticals  vs.  PolyPid

Fennec Pharmaceuticals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 5 (%) 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.

PolyPid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PolyPid has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PolyPid is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fennec Pharmaceuticals and PolyPid

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

The idea behind Fennec Pharmaceuticals and PolyPid 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 Stocks Directory module to find actively traded stocks across global markets.