Correlation Between Abeona Therapeutics and AbcamPLC

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

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

Diversification Opportunities for Abeona Therapeutics and AbcamPLC

0.57

Correlation Coefficient

Abeona Therapeutics  AbcamPLC

Very weak diversification

The 3 months correlation between Abeona and AbcamPLC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Abeona Therapeutics and AbcamPLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbcamPLC and Abeona Therapeutics 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 Abeona Therapeutics are associated (or correlated) with AbcamPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbcamPLC has no effect on the direction of Abeona Therapeutics i.e., Abeona Therapeutics and AbcamPLC go up and down completely randomly.

Pair Corralation between Abeona Therapeutics and AbcamPLC

Given the investment horizon of 90 days Abeona Therapeutics is expected to generate 6.52 times more return on investment than AbcamPLC. However, Abeona Therapeutics is 6.52 times more volatile than AbcamPLC. It trades about 0.12 of its potential returns per unit of risk. AbcamPLC is currently generating about 0.21 per unit of risk. If you would invest  428.00  in Abeona Therapeutics on January 17, 2024 and sell it today you would earn a total of  336.00  from holding Abeona Therapeutics or generate 78.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	27.64%
Values	Daily Returns

Abeona Therapeutics  vs.  AbcamPLC

Abeona Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Abeona Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

AbcamPLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Abeona Therapeutics and AbcamPLC

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

The idea behind Abeona Therapeutics and AbcamPLC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.