Correlation Between FWBI Old and Connect Biopharma

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Can any of the company-specific risk be diversified away by investing in both FWBI Old and Connect Biopharma 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 FWBI Old and Connect Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FWBI Old and Connect Biopharma Holdings, you can compare the effects of market volatilities on FWBI Old and Connect Biopharma 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 FWBI Old with a short position of Connect Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of FWBI Old and Connect Biopharma.

Diversification Opportunities for FWBI Old and Connect Biopharma

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between FWBI and Connect is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding FWBI Old and Connect Biopharma Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connect Biopharma and FWBI Old 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 FWBI Old are associated (or correlated) with Connect Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connect Biopharma has no effect on the direction of FWBI Old i.e., FWBI Old and Connect Biopharma go up and down completely randomly.

Pair Corralation between FWBI Old and Connect Biopharma

If you would invest  125.00  in Connect Biopharma Holdings on October 10, 2024 and sell it today you would lose (13.00) from holding Connect Biopharma Holdings or give up 10.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy0.8%
ValuesDaily Returns

FWBI Old  vs.  Connect Biopharma Holdings

 Performance 
       Timeline  
FWBI Old 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FWBI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, FWBI Old is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Connect Biopharma 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Connect Biopharma Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Connect Biopharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FWBI Old and Connect Biopharma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FWBI Old and Connect Biopharma

The main advantage of trading using opposite FWBI Old and Connect Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FWBI Old position performs unexpectedly, Connect Biopharma 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 Connect Biopharma will offset losses from the drop in Connect Biopharma's long position.
The idea behind FWBI Old and Connect Biopharma Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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