Correlation Between Fresh Tracks and Theriva Biologics

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

By analyzing existing cross correlation between Fresh Tracks Therapeutics and Theriva Biologics, you can compare the effects of market volatilities on Fresh Tracks and Theriva Biologics 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 Fresh Tracks with a short position of Theriva Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Tracks and Theriva Biologics.

Diversification Opportunities for Fresh Tracks and Theriva Biologics

-0.23

Correlation Coefficient

Fresh Tracks  Theriva Biologics

Very good diversification

The 3 months correlation between Fresh and Theriva is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Tracks Therapeutics and Theriva Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theriva Biologics and Fresh Tracks 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 Fresh Tracks Therapeutics are associated (or correlated) with Theriva Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theriva Biologics has no effect on the direction of Fresh Tracks i.e., Fresh Tracks and Theriva Biologics go up and down completely randomly.

Pair Corralation between Fresh Tracks and Theriva Biologics

If you would invest  130.00  in Theriva Biologics on October 26, 2024 and sell it today you would earn a total of  7.00  from holding Theriva Biologics or generate 5.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.56%
Values	Daily Returns

Fresh Tracks Therapeutics  vs.  Theriva Biologics

Fresh Tracks Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Tracks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fresh Tracks is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Theriva Biologics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Theriva Biologics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Theriva Biologics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fresh Tracks and Theriva Biologics

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

The idea behind Fresh Tracks Therapeutics and Theriva Biologics 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.