Correlation Between Ascletis Pharma and ABIVAX Société

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

By analyzing existing cross correlation between Ascletis Pharma and ABIVAX Socit Anonyme, you can compare the effects of market volatilities on Ascletis Pharma and ABIVAX Société 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 Ascletis Pharma with a short position of ABIVAX Société. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascletis Pharma and ABIVAX Société.

Diversification Opportunities for Ascletis Pharma and ABIVAX Société

-0.48

Correlation Coefficient

Ascletis Pharma  ABIVAX Société

Very good diversification

The 3 months correlation between Ascletis and ABIVAX is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ascletis Pharma and ABIVAX Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIVAX Socit Anonyme and Ascletis Pharma 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 Ascletis Pharma are associated (or correlated) with ABIVAX Société. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIVAX Socit Anonyme has no effect on the direction of Ascletis Pharma i.e., Ascletis Pharma and ABIVAX Société go up and down completely randomly.

Pair Corralation between Ascletis Pharma and ABIVAX Société

Assuming the 90 days horizon Ascletis Pharma is expected to under-perform the ABIVAX Société. In addition to that, Ascletis Pharma is 1.09 times more volatile than ABIVAX Socit Anonyme. It trades about -0.04 of its total potential returns per unit of risk. ABIVAX Socit Anonyme is currently generating about -0.01 per unit of volatility. If you would invest  1,821  in ABIVAX Socit Anonyme on March 31, 2024 and sell it today you would lose (306.00) from holding ABIVAX Socit Anonyme or give up 16.8% of portfolio value over 90 days.

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

Ascletis Pharma  vs.  ABIVAX Socit Anonyme

Ascletis Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascletis Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ABIVAX Socit Anonyme

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ABIVAX Socit Anonyme are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ABIVAX Société reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascletis Pharma and ABIVAX Société

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

The idea behind Ascletis Pharma and ABIVAX Socit Anonyme 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.