Correlation Between Tonix Pharmaceuticals and Atlas Arteria

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

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

Diversification Opportunities for Tonix Pharmaceuticals and Atlas Arteria

-0.63

Correlation Coefficient

Tonix Pharmaceuticals  Atlas Arteria

Excellent diversification

The 3 months correlation between Tonix and Atlas is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tonix Pharmaceuticals Holding and Atlas Arteria Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Arteria Limited and Tonix Pharmaceuticals 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 Tonix Pharmaceuticals Holding are associated (or correlated) with Atlas Arteria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Arteria Limited has no effect on the direction of Tonix Pharmaceuticals i.e., Tonix Pharmaceuticals and Atlas Arteria go up and down completely randomly.

Pair Corralation between Tonix Pharmaceuticals and Atlas Arteria

Given the investment horizon of 90 days Tonix Pharmaceuticals Holding is expected to under-perform the Atlas Arteria. In addition to that, Tonix Pharmaceuticals is 1.32 times more volatile than Atlas Arteria Limited. It trades about -0.09 of its total potential returns per unit of risk. Atlas Arteria Limited is currently generating about 0.03 per unit of volatility. If you would invest  495.00  in Atlas Arteria Limited on October 24, 2024 and sell it today you would lose (150.00) from holding Atlas Arteria Limited or give up 30.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.88%
Values	Daily Returns

Tonix Pharmaceuticals Holding  vs.  Atlas Arteria Limited

Tonix Pharmaceuticals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tonix Pharmaceuticals Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Tonix Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Atlas Arteria Limited

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Tonix Pharmaceuticals and Atlas Arteria

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

The idea behind Tonix Pharmaceuticals Holding and Atlas Arteria Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.