Correlation Between Annexon and Iteos Therapeutics

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

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

Diversification Opportunities for Annexon and Iteos Therapeutics

-0.19

Correlation Coefficient

Annexon  Iteos Therapeutics

Good diversification

The 3 months correlation between Annexon and Iteos is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Annexon and Iteos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteos Therapeutics and Annexon 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 Annexon are associated (or correlated) with Iteos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iteos Therapeutics has no effect on the direction of Annexon i.e., Annexon and Iteos Therapeutics go up and down completely randomly.

Pair Corralation between Annexon and Iteos Therapeutics

Given the investment horizon of 90 days Annexon is expected to generate 0.81 times more return on investment than Iteos Therapeutics. However, Annexon is 1.24 times less risky than Iteos Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Iteos Therapeutics is currently generating about -0.21 per unit of risk. If you would invest  541.00  in Annexon on September 2, 2024 and sell it today you would lose (2.00) from holding Annexon or give up 0.37% of portfolio value over 90 days.

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

Annexon  vs.  Iteos Therapeutics

Annexon

Risk-Adjusted Performance

1 of 100

Weak

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

Iteos Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iteos Therapeutics 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 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.

Pair Trading with Annexon and Iteos Therapeutics

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

The idea behind Annexon and Iteos Therapeutics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.