Correlation Between Intelgenx Technologs and BetterLife Pharma

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

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

Diversification Opportunities for Intelgenx Technologs and BetterLife Pharma

0.0

Correlation Coefficient

Intelgenx Technologs  BetterLife Pharma

Pay attention - limited upside

The 3 months correlation between Intelgenx and BetterLife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intelgenx Technologs and BetterLife Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetterLife Pharma and Intelgenx Technologs 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 Intelgenx Technologs are associated (or correlated) with BetterLife Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetterLife Pharma has no effect on the direction of Intelgenx Technologs i.e., Intelgenx Technologs and BetterLife Pharma go up and down completely randomly.

Pair Corralation between Intelgenx Technologs and BetterLife Pharma

Given the investment horizon of 90 days Intelgenx Technologs is expected to generate 11.35 times less return on investment than BetterLife Pharma. But when comparing it to its historical volatility, Intelgenx Technologs is 3.42 times less risky than BetterLife Pharma. It trades about 0.01 of its potential returns per unit of risk. BetterLife Pharma is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6.60  in BetterLife Pharma on December 5, 2024 and sell it today you would earn a total of  0.06  from holding BetterLife Pharma or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Intelgenx Technologs  vs.  BetterLife Pharma

Intelgenx Technologs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intelgenx Technologs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intelgenx Technologs is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BetterLife Pharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BetterLife Pharma are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BetterLife Pharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intelgenx Technologs and BetterLife Pharma

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

The idea behind Intelgenx Technologs and BetterLife Pharma 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.