Correlation Between Helix BioPharma and ADF

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

By analyzing existing cross correlation between Helix BioPharma Corp and ADF Group, you can compare the effects of market volatilities on Helix BioPharma and ADF 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 Helix BioPharma with a short position of ADF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helix BioPharma and ADF.

Diversification Opportunities for Helix BioPharma and ADF

0.34

Correlation Coefficient

Helix BioPharma  ADF

Weak diversification

The 3 months correlation between Helix and ADF is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Helix BioPharma Corp and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group and Helix BioPharma 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 Helix BioPharma Corp are associated (or correlated) with ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Helix BioPharma i.e., Helix BioPharma and ADF go up and down completely randomly.

Pair Corralation between Helix BioPharma and ADF

Assuming the 90 days trading horizon Helix BioPharma is expected to generate 1.79 times less return on investment than ADF. In addition to that, Helix BioPharma is 1.59 times more volatile than ADF Group. It trades about 0.02 of its total potential returns per unit of risk. ADF Group is currently generating about 0.05 per unit of volatility. If you would invest  733.00  in ADF Group on October 6, 2024 and sell it today you would earn a total of  237.00  from holding ADF Group or generate 32.33% return on investment over 90 days.

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

Helix BioPharma Corp  vs.  ADF Group

Helix BioPharma Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helix BioPharma Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Helix BioPharma is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ADF Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADF Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ADF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Helix BioPharma and ADF

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

The idea behind Helix BioPharma Corp and ADF Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.