Correlation Between Easton Pharmaceutica and Aequus Pharmaceuticals

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

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

Diversification Opportunities for Easton Pharmaceutica and Aequus Pharmaceuticals

0.0

Correlation Coefficient

Easton Pharmaceutica  Aequus Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Easton and Aequus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Easton Pharmaceutica and Aequus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aequus Pharmaceuticals and Easton Pharmaceutica 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 Easton Pharmaceutica are associated (or correlated) with Aequus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aequus Pharmaceuticals has no effect on the direction of Easton Pharmaceutica i.e., Easton Pharmaceutica and Aequus Pharmaceuticals go up and down completely randomly.

Pair Corralation between Easton Pharmaceutica and Aequus Pharmaceuticals

If you would invest  0.01  in Easton Pharmaceutica on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Easton Pharmaceutica or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Easton Pharmaceutica  vs.  Aequus Pharmaceuticals

Easton Pharmaceutica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Easton Pharmaceutica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Easton Pharmaceutica is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Aequus Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aequus Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Easton Pharmaceutica and Aequus Pharmaceuticals

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

The idea behind Easton Pharmaceutica and Aequus Pharmaceuticals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.