Correlation Between FWBI Old and Eyepoint Pharmaceuticals

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

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

Diversification Opportunities for FWBI Old and Eyepoint Pharmaceuticals

0.55

Correlation Coefficient

FWBI Old  Eyepoint Pharmaceuticals

Very weak diversification

The 3 months correlation between FWBI and Eyepoint is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FWBI Old and Eyepoint Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eyepoint Pharmaceuticals 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 Eyepoint Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eyepoint Pharmaceuticals has no effect on the direction of FWBI Old i.e., FWBI Old and Eyepoint Pharmaceuticals go up and down completely randomly.

Pair Corralation between FWBI Old and Eyepoint Pharmaceuticals

If you would invest  1,033  in Eyepoint Pharmaceuticals on October 10, 2024 and sell it today you would lose (111.00) from holding Eyepoint Pharmaceuticals or give up 10.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.81%
Values	Daily Returns

FWBI Old  vs.  Eyepoint Pharmaceuticals

FWBI Old

Risk-Adjusted Performance

0 of 100

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.

Eyepoint Pharmaceuticals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eyepoint Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eyepoint Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FWBI Old and Eyepoint Pharmaceuticals

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

The idea behind FWBI Old and Eyepoint 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.