Correlation Between Axon Enterprise and Faron Pharmaceuticals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise and Faron Pharmaceuticals 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 Axon Enterprise and Faron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and Faron Pharmaceuticals Oy, you can compare the effects of market volatilities on Axon Enterprise and Faron Pharmaceuticals 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 Axon Enterprise with a short position of Faron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and Faron Pharmaceuticals.

Diversification Opportunities for Axon Enterprise and Faron Pharmaceuticals

AxonFaronDiversified AwayAxonFaronDiversified Away100%
-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Axon and Faron is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise and Faron Pharmaceuticals Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faron Pharmaceuticals and Axon Enterprise 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 Axon Enterprise are associated (or correlated) with Faron Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faron Pharmaceuticals has no effect on the direction of Axon Enterprise i.e., Axon Enterprise and Faron Pharmaceuticals go up and down completely randomly.

Pair Corralation between Axon Enterprise and Faron Pharmaceuticals

Assuming the 90 days trading horizon Axon Enterprise is expected to generate 1.04 times more return on investment than Faron Pharmaceuticals. However, Axon Enterprise is 1.04 times more volatile than Faron Pharmaceuticals Oy. It trades about 0.2 of its potential returns per unit of risk. Faron Pharmaceuticals Oy is currently generating about -0.09 per unit of risk. If you would invest  39,603  in Axon Enterprise on September 23, 2024 and sell it today you would earn a total of  23,183  from holding Axon Enterprise or generate 58.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Axon Enterprise  vs.  Faron Pharmaceuticals Oy

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -40-20020406080
JavaScript chart by amCharts 3.21.150HKE FARN
       Timeline  
Axon Enterprise 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Axon Enterprise are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axon Enterprise unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec400450500550600650700
Faron Pharmaceuticals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Faron Pharmaceuticals Oy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec140160180200220

Axon Enterprise and Faron Pharmaceuticals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.76-8.81-5.86-2.90.04923.216.489.7513.02 0.0150.0200.025
JavaScript chart by amCharts 3.21.150HKE FARN
       Returns  

Pair Trading with Axon Enterprise and Faron Pharmaceuticals

The main advantage of trading using opposite Axon Enterprise and Faron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise position performs unexpectedly, Faron Pharmaceuticals 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 Faron Pharmaceuticals will offset losses from the drop in Faron Pharmaceuticals' long position.
The idea behind Axon Enterprise and Faron Pharmaceuticals Oy 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.
Check out your portfolio center.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.