Correlation Between Tonix Pharmaceuticals and Protokinetix

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

Diversification Opportunities for Tonix Pharmaceuticals and Protokinetix

-0.06

Correlation Coefficient

Tonix Pharmaceuticals  Protokinetix

Good diversification

The 3 months correlation between Tonix and Protokinetix is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tonix Pharmaceuticals Holding and Protokinetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protokinetix 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 Protokinetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protokinetix has no effect on the direction of Tonix Pharmaceuticals i.e., Tonix Pharmaceuticals and Protokinetix go up and down completely randomly.

Pair Corralation between Tonix Pharmaceuticals and Protokinetix

Given the investment horizon of 90 days Tonix Pharmaceuticals Holding is expected to generate 1.17 times more return on investment than Protokinetix. However, Tonix Pharmaceuticals is 1.17 times more volatile than Protokinetix. It trades about 0.06 of its potential returns per unit of risk. Protokinetix is currently generating about 0.04 per unit of risk. If you would invest  57.00  in Tonix Pharmaceuticals Holding on September 21, 2024 and sell it today you would earn a total of  5.06  from holding Tonix Pharmaceuticals Holding or generate 8.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.07%
Values	Daily Returns

Tonix Pharmaceuticals Holding  vs.  Protokinetix

Tonix Pharmaceuticals

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tonix Pharmaceuticals Holding are ranked lower than 15 (%) 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.

Protokinetix

Risk-Adjusted Performance

3 of 100

Weak

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

Pair Trading with Tonix Pharmaceuticals and Protokinetix

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

The idea behind Tonix Pharmaceuticals Holding and Protokinetix 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.