Correlation Between Allogene Therapeutics and Anixa Biosciences

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

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

Diversification Opportunities for Allogene Therapeutics and Anixa Biosciences

0.63

Correlation Coefficient

Allogene Therapeutics  Anixa Biosciences

Poor diversification

The 3 months correlation between Allogene and Anixa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Allogene Therapeutics and Anixa Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anixa Biosciences and Allogene Therapeutics 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 Allogene Therapeutics 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 Allogene Therapeutics i.e., Allogene Therapeutics and Anixa Biosciences go up and down completely randomly.

Pair Corralation between Allogene Therapeutics and Anixa Biosciences

Given the investment horizon of 90 days Allogene Therapeutics is expected to generate 1.28 times more return on investment than Anixa Biosciences. However, Allogene Therapeutics is 1.28 times more volatile than Anixa Biosciences. It trades about -0.04 of its potential returns per unit of risk. Anixa Biosciences is currently generating about -0.06 per unit of risk. If you would invest  262.00  in Allogene Therapeutics on September 25, 2024 and sell it today you would lose (53.00) from holding Allogene Therapeutics or give up 20.23% of portfolio value over 90 days.

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

Allogene Therapeutics  vs.  Anixa Biosciences

Allogene Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allogene Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Anixa Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anixa Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Allogene Therapeutics and Anixa Biosciences

The main advantage of trading using opposite Allogene Therapeutics and Anixa Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allogene Therapeutics 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 Allogene Therapeutics 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.