Correlation Between Evofem Biosciences and PDS Biotechnology

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

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

Diversification Opportunities for Evofem Biosciences and PDS Biotechnology

0.25

Correlation Coefficient

Evofem Biosciences  PDS Biotechnology

Modest diversification

The 3 months correlation between Evofem and PDS is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Evofem Biosciences and PDS Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDS Biotechnology Corp and Evofem Biosciences 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 Evofem Biosciences are associated (or correlated) with PDS Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDS Biotechnology Corp has no effect on the direction of Evofem Biosciences i.e., Evofem Biosciences and PDS Biotechnology go up and down completely randomly.

Pair Corralation between Evofem Biosciences and PDS Biotechnology

If you would invest  64.00  in Evofem Biosciences on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Evofem Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Evofem Biosciences  vs.  PDS Biotechnology Corp

Evofem Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evofem Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Evofem Biosciences is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

PDS Biotechnology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PDS Biotechnology Corp 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Evofem Biosciences and PDS Biotechnology

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

The idea behind Evofem Biosciences and PDS Biotechnology Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.