Correlation Between Evofem Biosciences and Tonix Pharmaceuticals

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

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

Diversification Opportunities for Evofem Biosciences and Tonix Pharmaceuticals

0.08

Correlation Coefficient

Evofem Biosciences  Tonix Pharmaceuticals

Significant diversification

The 3 months correlation between Evofem and Tonix is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Evofem Biosciences and Tonix Pharmaceuticals Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonix Pharmaceuticals 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 Tonix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonix Pharmaceuticals has no effect on the direction of Evofem Biosciences i.e., Evofem Biosciences and Tonix Pharmaceuticals go up and down completely randomly.

Pair Corralation between Evofem Biosciences and Tonix Pharmaceuticals

If you would invest  17.00  in Tonix Pharmaceuticals Holding on September 2, 2024 and sell it today you would earn a total of  2.00  from holding Tonix Pharmaceuticals Holding or generate 11.76% return on investment over 90 days.

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

Evofem Biosciences  vs.  Tonix Pharmaceuticals Holding

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Tonix Pharmaceuticals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tonix Pharmaceuticals Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Tonix Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evofem Biosciences and Tonix Pharmaceuticals

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

The idea behind Evofem Biosciences and Tonix Pharmaceuticals Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.