Correlation Between Sunshine Biopharma and Athenex

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

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

Diversification Opportunities for Sunshine Biopharma and Athenex

-0.38

Correlation Coefficient

Sunshine Biopharma  Athenex

Very good diversification

The 3 months correlation between Sunshine and Athenex is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma Warrant and Athenex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athenex and Sunshine Biopharma 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 Sunshine Biopharma Warrant 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 Sunshine Biopharma i.e., Sunshine Biopharma and Athenex go up and down completely randomly.

Pair Corralation between Sunshine Biopharma and Athenex

Assuming the 90 days horizon Sunshine Biopharma Warrant is expected to generate 5.03 times more return on investment than Athenex. However, Sunshine Biopharma is 5.03 times more volatile than Athenex. It trades about 0.08 of its potential returns per unit of risk. Athenex is currently generating about -0.13 per unit of risk. If you would invest  38.00  in Sunshine Biopharma Warrant on September 4, 2024 and sell it today you would lose (20.00) from holding Sunshine Biopharma Warrant or give up 52.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.0%
Values	Daily Returns

Sunshine Biopharma Warrant  vs.  Athenex

Sunshine Biopharma

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunshine Biopharma Warrant are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting primary indicators, Sunshine Biopharma showed solid returns over the last few months and may actually be approaching a breakup point.

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 Sunshine Biopharma and Athenex

The main advantage of trading using opposite Sunshine Biopharma and Athenex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunshine Biopharma 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 Sunshine Biopharma Warrant 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.