Correlation Between Athenex and Medmen Enterprises

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

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

Diversification Opportunities for Athenex and Medmen Enterprises

-0.88

Correlation Coefficient

Athenex  Medmen Enterprises

Pay attention - limited upside

The 3 months correlation between Athenex and Medmen is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Athenex and Medmen Enterprises Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medmen Enterprises Class and Athenex 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 Athenex are associated (or correlated) with Medmen Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medmen Enterprises Class has no effect on the direction of Athenex i.e., Athenex and Medmen Enterprises go up and down completely randomly.

Pair Corralation between Athenex and Medmen Enterprises

If you would invest  0.01  in Medmen Enterprises Class on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Medmen Enterprises Class or generate 0.0% return on investment over 90 days.

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

Athenex  vs.  Medmen Enterprises Class

Athenex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Medmen Enterprises Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medmen Enterprises Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Medmen Enterprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Athenex and Medmen Enterprises

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

The idea behind Athenex and Medmen Enterprises Class 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.