Correlation Between Abcam PLC and Anixa Biosciences

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

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

Diversification Opportunities for Abcam PLC and Anixa Biosciences

0.22

Correlation Coefficient

Abcam PLC  Anixa Biosciences

Modest diversification

The 3 months correlation between Abcam and Anixa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Abcam PLC and Anixa Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anixa Biosciences and Abcam PLC 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 Abcam PLC are associated (or correlated) with Anixa Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anixa Biosciences has no effect on the direction of Abcam PLC i.e., Abcam PLC and Anixa Biosciences go up and down completely randomly.

Pair Corralation between Abcam PLC and Anixa Biosciences

If you would invest  336.00  in Anixa Biosciences on September 5, 2024 and sell it today you would lose (4.00) from holding Anixa Biosciences or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Abcam PLC  vs.  Anixa Biosciences

Abcam PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abcam PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Abcam PLC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Anixa Biosciences

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anixa Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Anixa Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Abcam PLC and Anixa Biosciences

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

The idea behind Abcam PLC and Anixa Biosciences 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.