Correlation Between Petros Pharmaceuticals and Athenex

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

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

Diversification Opportunities for Petros Pharmaceuticals and Athenex

0.39

Correlation Coefficient

Petros Pharmaceuticals  Athenex

Weak diversification

The 3 months correlation between Petros and Athenex is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Petros Pharmaceuticals and Athenex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athenex and Petros 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 Petros Pharmaceuticals are associated (or correlated) with Athenex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athenex has no effect on the direction of Petros Pharmaceuticals i.e., Petros Pharmaceuticals and Athenex go up and down completely randomly.

Pair Corralation between Petros Pharmaceuticals and Athenex

If you would invest  37.00  in Petros Pharmaceuticals on September 12, 2024 and sell it today you would lose (1.10) from holding Petros Pharmaceuticals or give up 2.97% of portfolio value over 90 days.

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

Petros Pharmaceuticals  vs.  Athenex

Petros Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Petros Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Petros Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Athenex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athenex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Athenex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Petros Pharmaceuticals and Athenex

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

The idea behind Petros Pharmaceuticals and Athenex 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.