Correlation Between Incannex Healthcare and Advantis Corp

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

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

Diversification Opportunities for Incannex Healthcare and Advantis Corp

0.0

Correlation Coefficient

Incannex Healthcare  Advantis Corp

Pay attention - limited upside

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

Pair Corralation between Incannex Healthcare and Advantis Corp

Given the investment horizon of 90 days Incannex Healthcare Ltd is expected to under-perform the Advantis Corp. But the stock apears to be less risky and, when comparing its historical volatility, Incannex Healthcare Ltd is 22.15 times less risky than Advantis Corp. The stock trades about -0.04 of its potential returns per unit of risk. The Advantis Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Advantis Corp on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Advantis Corp or generate 9.223372036854776E16% return on investment over 90 days.

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

Incannex Healthcare Ltd  vs.  Advantis Corp

Incannex Healthcare

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Incannex Healthcare Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Advantis Corp

Risk-Adjusted Performance

10 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advantis Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Advantis Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Incannex Healthcare and Advantis Corp

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

The idea behind Incannex Healthcare Ltd and Advantis Corp 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.