Correlation Between Incannex Healthcare and Agile Thrpe

Can any of the company-specific risk be diversified away by investing in both Incannex Healthcare and Agile Thrpe 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 Agile Thrpe 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 Agile Thrpe, you can compare the effects of market volatilities on Incannex Healthcare and Agile Thrpe 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 Agile Thrpe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incannex Healthcare and Agile Thrpe.

Diversification Opportunities for Incannex Healthcare and Agile Thrpe

-0.56

Correlation Coefficient

Incannex Healthcare  Agile Thrpe

Excellent diversification

The 3 months correlation between Incannex and Agile is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Incannex Healthcare Ltd and Agile Thrpe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Thrpe 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 Agile Thrpe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Thrpe has no effect on the direction of Incannex Healthcare i.e., Incannex Healthcare and Agile Thrpe go up and down completely randomly.

Pair Corralation between Incannex Healthcare and Agile Thrpe

If you would invest  173.00  in Incannex Healthcare Ltd on September 3, 2024 and sell it today you would earn a total of  5.00  from holding Incannex Healthcare Ltd or generate 2.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Incannex Healthcare Ltd  vs.  Agile Thrpe

Incannex Healthcare

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Incannex Healthcare Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Incannex Healthcare disclosed solid returns over the last few months and may actually be approaching a breakup point.

Agile Thrpe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agile Thrpe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Agile Thrpe is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Incannex Healthcare and Agile Thrpe

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

The idea behind Incannex Healthcare Ltd and Agile Thrpe 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.