Correlation Between Armata Pharmaceuticals and Aravive

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

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

Diversification Opportunities for Armata Pharmaceuticals and Aravive

-0.12

Correlation Coefficient

Armata Pharmaceuticals  Aravive

Good diversification

The 3 months correlation between Armata and Aravive is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and Aravive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aravive and Armata 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 Armata Pharmaceuticals are associated (or correlated) with Aravive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aravive has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and Aravive go up and down completely randomly.

Pair Corralation between Armata Pharmaceuticals and Aravive

If you would invest  240.00  in Armata Pharmaceuticals on August 31, 2024 and sell it today you would lose (10.00) from holding Armata Pharmaceuticals or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Armata Pharmaceuticals  vs.  Aravive

Armata Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armata Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Armata Pharmaceuticals is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Aravive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aravive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aravive is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Armata Pharmaceuticals and Aravive

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

The idea behind Armata Pharmaceuticals and Aravive 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .