Correlation Between INmune Bio and Fennec Pharmaceuticals

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

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

Diversification Opportunities for INmune Bio and Fennec Pharmaceuticals

-0.35

Correlation Coefficient

INmune Bio  Fennec Pharmaceuticals

Very good diversification

The 3 months correlation between INmune and Fennec is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding INmune Bio and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals and INmune Bio 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 INmune Bio are associated (or correlated) with Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of INmune Bio i.e., INmune Bio and Fennec Pharmaceuticals go up and down completely randomly.

Pair Corralation between INmune Bio and Fennec Pharmaceuticals

Given the investment horizon of 90 days INmune Bio is expected to under-perform the Fennec Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, INmune Bio is 1.07 times less risky than Fennec Pharmaceuticals. The stock trades about -0.04 of its potential returns per unit of risk. The Fennec Pharmaceuticals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  511.00  in Fennec Pharmaceuticals on September 22, 2024 and sell it today you would earn a total of  73.00  from holding Fennec Pharmaceuticals or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

INmune Bio  vs.  Fennec Pharmaceuticals

INmune Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INmune Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Fennec Pharmaceuticals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Fennec Pharmaceuticals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INmune Bio and Fennec Pharmaceuticals

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

The idea behind INmune Bio and Fennec 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.