Correlation Between AbbVie and Atreca

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Can any of the company-specific risk be diversified away by investing in both AbbVie and Atreca 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 AbbVie and Atreca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbbVie Inc and Atreca Inc, you can compare the effects of market volatilities on AbbVie and Atreca 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 AbbVie with a short position of Atreca. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbbVie and Atreca.

Diversification Opportunities for AbbVie and Atreca

-0.86
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AbbVie and Atreca is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AbbVie Inc and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc and AbbVie 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 AbbVie Inc are associated (or correlated) with Atreca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atreca Inc has no effect on the direction of AbbVie i.e., AbbVie and Atreca go up and down completely randomly.

Pair Corralation between AbbVie and Atreca

Given the investment horizon of 90 days AbbVie Inc is expected to under-perform the Atreca. But the stock apears to be less risky and, when comparing its historical volatility, AbbVie Inc is 7.97 times less risky than Atreca. The stock trades about -0.39 of its potential returns per unit of risk. The Atreca Inc is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  79.00  in Atreca Inc on October 29, 2022 and sell it today you would earn a total of  78.50  from holding Atreca Inc or generate 99.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

AbbVie Inc  vs.  Atreca Inc

 Performance (%) 
       Timeline  
AbbVie Inc 
AbbVie Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AbbVie Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental drivers, AbbVie is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AbbVie Price Channel

Atreca Inc 
Atreca Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atreca Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Atreca revealed solid returns over the last few months and may actually be approaching a breakup point.

Atreca Price Channel

AbbVie and Atreca Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AbbVie and Atreca

The main advantage of trading using opposite AbbVie and Atreca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbbVie position performs unexpectedly, Atreca 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 Atreca will offset losses from the drop in Atreca's long position.
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The idea behind AbbVie Inc and Atreca Inc 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.
Atreca vs. Agilent Technologies
Atreca vs. Acasti Pharma
Atreca vs. AstraZeneca PLC ADR
Atreca vs. Cocrystal Pharma
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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