Correlation Between Fennec Pharmaceuticals and Jaguar Animal

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

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

Diversification Opportunities for Fennec Pharmaceuticals and Jaguar Animal

-0.24

Correlation Coefficient

Fennec Pharmaceuticals  Jaguar Animal

Very good diversification

The 3 months correlation between Fennec and Jaguar is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Jaguar Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Animal Health and Fennec 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 Fennec Pharmaceuticals are associated (or correlated) with Jaguar Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Animal Health has no effect on the direction of Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Jaguar Animal go up and down completely randomly.

Pair Corralation between Fennec Pharmaceuticals and Jaguar Animal

Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to under-perform the Jaguar Animal. But the stock apears to be less risky and, when comparing its historical volatility, Fennec Pharmaceuticals is 3.28 times less risky than Jaguar Animal. The stock trades about -0.12 of its potential returns per unit of risk. The Jaguar Animal Health is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  538.00  in Jaguar Animal Health on March 6, 2024 and sell it today you would lose (144.00) from holding Jaguar Animal Health or give up 26.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fennec Pharmaceuticals  vs.  Jaguar Animal Health

Fennec Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fennec Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Jaguar Animal Health

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jaguar Animal Health are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jaguar Animal showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fennec Pharmaceuticals and Jaguar Animal

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

The idea behind Fennec Pharmaceuticals and Jaguar Animal Health 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.