Correlation Between Marinus Pharmaceuticals and Annexon

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

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

Diversification Opportunities for Marinus Pharmaceuticals and Annexon

0.8

Correlation Coefficient

Marinus Pharmaceuticals  Annexon

Very poor diversification

The 3 months correlation between Marinus and Annexon is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Marinus Pharmaceuticals and Annexon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexon and Marinus 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 Marinus Pharmaceuticals are associated (or correlated) with Annexon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexon has no effect on the direction of Marinus Pharmaceuticals i.e., Marinus Pharmaceuticals and Annexon go up and down completely randomly.

Pair Corralation between Marinus Pharmaceuticals and Annexon

Given the investment horizon of 90 days Marinus Pharmaceuticals is expected to under-perform the Annexon. But the stock apears to be less risky and, when comparing its historical volatility, Marinus Pharmaceuticals is 1.08 times less risky than Annexon. The stock trades about 0.0 of its potential returns per unit of risk. The Annexon is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  454.00  in Annexon on March 29, 2024 and sell it today you would earn a total of  11.00  from holding Annexon or generate 2.42% return on investment over 90 days.

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

Marinus Pharmaceuticals  vs.  Annexon

Marinus Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marinus Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Annexon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Annexon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Marinus Pharmaceuticals and Annexon

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

The idea behind Marinus Pharmaceuticals and Annexon 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.