Correlation Between Sunniva and Aequus Pharmaceuticals

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

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

Diversification Opportunities for Sunniva and Aequus Pharmaceuticals

0.0

Correlation Coefficient

Sunniva  Aequus Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Sunniva and Aequus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sunniva and Aequus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aequus Pharmaceuticals and Sunniva 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 Sunniva are associated (or correlated) with Aequus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aequus Pharmaceuticals has no effect on the direction of Sunniva i.e., Sunniva and Aequus Pharmaceuticals go up and down completely randomly.

Pair Corralation between Sunniva and Aequus Pharmaceuticals

If you would invest  0.71  in Aequus Pharmaceuticals on September 19, 2024 and sell it today you would lose (0.06) from holding Aequus Pharmaceuticals or give up 8.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Sunniva  vs.  Aequus Pharmaceuticals

Sunniva

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunniva has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sunniva is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Aequus Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aequus Pharmaceuticals 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 nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sunniva and Aequus Pharmaceuticals

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

The idea behind Sunniva and Aequus Pharmaceuticals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.