Correlation Between Tonix Pharmaceuticals and 23291KAK1

Can any of the company-specific risk be diversified away by investing in both Tonix Pharmaceuticals and 23291KAK1 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 23291KAK1 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 DH EUROPE FINANCE, you can compare the effects of market volatilities on Tonix Pharmaceuticals and 23291KAK1 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 23291KAK1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonix Pharmaceuticals and 23291KAK1.

Diversification Opportunities for Tonix Pharmaceuticals and 23291KAK1

-0.55

Correlation Coefficient

Tonix Pharmaceuticals  23291KAK1

Excellent diversification

The 3 months correlation between Tonix and 23291KAK1 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tonix Pharmaceuticals Holding and DH EUROPE FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DH EUROPE FINANCE 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 23291KAK1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DH EUROPE FINANCE has no effect on the direction of Tonix Pharmaceuticals i.e., Tonix Pharmaceuticals and 23291KAK1 go up and down completely randomly.

Pair Corralation between Tonix Pharmaceuticals and 23291KAK1

Given the investment horizon of 90 days Tonix Pharmaceuticals Holding is expected to generate 21.42 times more return on investment than 23291KAK1. However, Tonix Pharmaceuticals is 21.42 times more volatile than DH EUROPE FINANCE. It trades about 0.18 of its potential returns per unit of risk. DH EUROPE FINANCE is currently generating about -0.09 per unit of risk. If you would invest  19.00  in Tonix Pharmaceuticals Holding on October 10, 2024 and sell it today you would earn a total of  10.00  from holding Tonix Pharmaceuticals Holding or generate 52.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.0%
Values	Daily Returns

Tonix Pharmaceuticals Holding  vs.  DH EUROPE FINANCE

Tonix Pharmaceuticals

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tonix Pharmaceuticals Holding are ranked lower than 10 (%) 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.

DH EUROPE FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DH EUROPE FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 23291KAK1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tonix Pharmaceuticals and 23291KAK1

The main advantage of trading using opposite Tonix Pharmaceuticals and 23291KAK1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonix Pharmaceuticals position performs unexpectedly, 23291KAK1 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 23291KAK1 will offset losses from the drop in 23291KAK1's long position.

The idea behind Tonix Pharmaceuticals Holding and DH EUROPE FINANCE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.