Correlation Between PDS Biotechnology and Akebia Ther

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

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

Diversification Opportunities for PDS Biotechnology and Akebia Ther

-0.6

Correlation Coefficient

PDS Biotechnology  Akebia Ther

Excellent diversification

The 3 months correlation between PDS and Akebia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PDS Biotechnology Corp and Akebia Ther in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akebia Ther and PDS Biotechnology 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 PDS Biotechnology Corp are associated (or correlated) with Akebia Ther. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akebia Ther has no effect on the direction of PDS Biotechnology i.e., PDS Biotechnology and Akebia Ther go up and down completely randomly.

Pair Corralation between PDS Biotechnology and Akebia Ther

Given the investment horizon of 90 days PDS Biotechnology Corp is expected to under-perform the Akebia Ther. In addition to that, PDS Biotechnology is 1.24 times more volatile than Akebia Ther. It trades about -0.1 of its total potential returns per unit of risk. Akebia Ther is currently generating about 0.13 per unit of volatility. If you would invest  155.00  in Akebia Ther on August 30, 2024 and sell it today you would earn a total of  51.00  from holding Akebia Ther or generate 32.9% return on investment over 90 days.

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

PDS Biotechnology Corp  vs.  Akebia Ther

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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Akebia Ther

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akebia Ther are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Akebia Ther sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PDS Biotechnology and Akebia Ther

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

The idea behind PDS Biotechnology Corp and Akebia Ther 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..