Correlation Between Field Trip and Algernon Pharmaceuticals

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

By analyzing existing cross correlation between Field Trip Health and Algernon Pharmaceuticals, you can compare the effects of market volatilities on Field Trip and Algernon Pharmaceuticals 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 Field Trip with a short position of Algernon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Field Trip and Algernon Pharmaceuticals.

Diversification Opportunities for Field Trip and Algernon Pharmaceuticals

0.03

Correlation Coefficient

Field Trip  Algernon Pharmaceuticals

Significant diversification

The 3 months correlation between Field and Algernon is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Field Trip Health and Algernon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algernon Pharmaceuticals and Field Trip 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 Field Trip Health are associated (or correlated) with Algernon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algernon Pharmaceuticals has no effect on the direction of Field Trip i.e., Field Trip and Algernon Pharmaceuticals go up and down completely randomly.

Pair Corralation between Field Trip and Algernon Pharmaceuticals

Assuming the 90 days horizon Field Trip Health is expected to generate 0.85 times more return on investment than Algernon Pharmaceuticals. However, Field Trip Health is 1.17 times less risky than Algernon Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Algernon Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest  5.50  in Field Trip Health on September 23, 2024 and sell it today you would lose (1.38) from holding Field Trip Health or give up 25.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	22.65%
Values	Daily Returns

Field Trip Health  vs.  Algernon Pharmaceuticals

Field Trip Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Field Trip Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Field Trip is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Algernon Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Algernon Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Algernon Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Field Trip and Algernon Pharmaceuticals

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

The idea behind Field Trip Health and Algernon Pharmaceuticals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.