Correlation Between Fortress Biotech and EnGene Holdings

Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and EnGene Holdings 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 Fortress Biotech and EnGene Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortress Biotech Pref and enGene Holdings Common, you can compare the effects of market volatilities on Fortress Biotech and EnGene Holdings 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 Fortress Biotech with a short position of EnGene Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and EnGene Holdings.

Diversification Opportunities for Fortress Biotech and EnGene Holdings

-0.33

Correlation Coefficient

Fortress Biotech  EnGene Holdings

Very good diversification

The 3 months correlation between Fortress and EnGene is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and EnGene Holdings go up and down completely randomly.

Pair Corralation between Fortress Biotech and EnGene Holdings

Assuming the 90 days horizon Fortress Biotech Pref is expected to generate 0.32 times more return on investment than EnGene Holdings. However, Fortress Biotech Pref is 3.11 times less risky than EnGene Holdings. It trades about 0.05 of its potential returns per unit of risk. enGene Holdings Common is currently generating about -0.15 per unit of risk. If you would invest  1,571  in Fortress Biotech Pref on April 7, 2024 and sell it today you would earn a total of  60.00  from holding Fortress Biotech Pref or generate 3.82% return on investment over 90 days.

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

Fortress Biotech Pref  vs.  enGene Holdings Common

Fortress Biotech Pref

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Biotech Pref are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Fortress Biotech is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

enGene Holdings Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enGene Holdings Common 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 Etf's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2024. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Fortress Biotech and EnGene Holdings

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

The idea behind Fortress Biotech Pref and enGene Holdings Common 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.