Correlation Between Surrozen and AN2 Therapeutics

Can any of the company-specific risk be diversified away by investing in both Surrozen and AN2 Therapeutics 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 Surrozen and AN2 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Surrozen and AN2 Therapeutics, you can compare the effects of market volatilities on Surrozen and AN2 Therapeutics 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 Surrozen with a short position of AN2 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surrozen and AN2 Therapeutics.

Diversification Opportunities for Surrozen and AN2 Therapeutics

0.23

Correlation Coefficient

Surrozen  AN2 Therapeutics

Modest diversification

The 3 months correlation between Surrozen and AN2 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Surrozen and AN2 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AN2 Therapeutics and Surrozen 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 Surrozen are associated (or correlated) with AN2 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AN2 Therapeutics has no effect on the direction of Surrozen i.e., Surrozen and AN2 Therapeutics go up and down completely randomly.

Pair Corralation between Surrozen and AN2 Therapeutics

Given the investment horizon of 90 days Surrozen is expected to generate 2.15 times more return on investment than AN2 Therapeutics. However, Surrozen is 2.15 times more volatile than AN2 Therapeutics. It trades about 0.07 of its potential returns per unit of risk. AN2 Therapeutics is currently generating about 0.07 per unit of risk. If you would invest  987.00  in Surrozen on December 19, 2024 and sell it today you would earn a total of  145.00  from holding Surrozen or generate 14.69% return on investment over 90 days.

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

Surrozen  vs.  AN2 Therapeutics

Surrozen

Risk-Adjusted Performance

Insignificant

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

AN2 Therapeutics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AN2 Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, AN2 Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surrozen and AN2 Therapeutics

The main advantage of trading using opposite Surrozen and AN2 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surrozen position performs unexpectedly, AN2 Therapeutics 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 AN2 Therapeutics will offset losses from the drop in AN2 Therapeutics' long position.

The idea behind Surrozen and AN2 Therapeutics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.