Correlation Between Fortress Biotech and ZyVersa Therapeutics

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

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

Diversification Opportunities for Fortress Biotech and ZyVersa Therapeutics

0.54

Correlation Coefficient

Fortress Biotech  ZyVersa Therapeutics

Very weak diversification

The 3 months correlation between Fortress and ZyVersa is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and ZyVersa Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZyVersa Therapeutics and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with ZyVersa Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZyVersa Therapeutics has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and ZyVersa Therapeutics go up and down completely randomly.

Pair Corralation between Fortress Biotech and ZyVersa Therapeutics

Assuming the 90 days horizon Fortress Biotech Pref is expected to generate 0.41 times more return on investment than ZyVersa Therapeutics. However, Fortress Biotech Pref is 2.47 times less risky than ZyVersa Therapeutics. It trades about -0.03 of its potential returns per unit of risk. ZyVersa Therapeutics is currently generating about -0.13 per unit of risk. If you would invest  656.00  in Fortress Biotech Pref on September 1, 2024 and sell it today you would lose (65.00) from holding Fortress Biotech Pref or give up 9.91% of portfolio value over 90 days.

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

Fortress Biotech Pref  vs.  ZyVersa Therapeutics

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 weak 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.

ZyVersa Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZyVersa Therapeutics 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fortress Biotech and ZyVersa Therapeutics

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

The idea behind Fortress Biotech Pref and ZyVersa Therapeutics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.