Correlation Between Eupraxia Pharmaceuticals and Fortress Biotech

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

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

Diversification Opportunities for Eupraxia Pharmaceuticals and Fortress Biotech

-0.32

Correlation Coefficient

Eupraxia Pharmaceuticals  Fortress Biotech

Very good diversification

The 3 months correlation between Eupraxia and Fortress is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eupraxia Pharmaceuticals Commo and Fortress Biotech Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech Pref and Eupraxia 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 Eupraxia Pharmaceuticals Common are associated (or correlated) with Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech Pref has no effect on the direction of Eupraxia Pharmaceuticals i.e., Eupraxia Pharmaceuticals and Fortress Biotech go up and down completely randomly.

Pair Corralation between Eupraxia Pharmaceuticals and Fortress Biotech

Given the investment horizon of 90 days Eupraxia Pharmaceuticals Common is expected to generate 1.63 times more return on investment than Fortress Biotech. However, Eupraxia Pharmaceuticals is 1.63 times more volatile than Fortress Biotech Pref. It trades about 0.1 of its potential returns per unit of risk. Fortress Biotech Pref is currently generating about -0.03 per unit of risk. If you would invest  260.00  in Eupraxia Pharmaceuticals Common on September 3, 2024 and sell it today you would earn a total of  75.00  from holding Eupraxia Pharmaceuticals Common or generate 28.85% return on investment over 90 days.

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

Eupraxia Pharmaceuticals Commo  vs.  Fortress Biotech Pref

Eupraxia Pharmaceuticals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eupraxia Pharmaceuticals Common are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Eupraxia Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Fortress Biotech Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortress Biotech Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Preferred Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Eupraxia Pharmaceuticals and Fortress Biotech

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

The idea behind Eupraxia Pharmaceuticals Common and Fortress Biotech Pref 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.