Correlation Between Abeona Therapeutics and Acorda Therapeutics

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

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

Diversification Opportunities for Abeona Therapeutics and Acorda Therapeutics

-0.51

Correlation Coefficient

Abeona Therapeutics  Acorda Therapeutics

Excellent diversification

The 3 months correlation between Abeona and Acorda is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Abeona Therapeutics and Acorda Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorda Therapeutics 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 Acorda Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorda Therapeutics has no effect on the direction of Abeona Therapeutics i.e., Abeona Therapeutics and Acorda Therapeutics go up and down completely randomly.

Pair Corralation between Abeona Therapeutics and Acorda Therapeutics

Given the investment horizon of 90 days Abeona Therapeutics is expected to generate 0.16 times more return on investment than Acorda Therapeutics. However, Abeona Therapeutics is 6.18 times less risky than Acorda Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Acorda Therapeutics is currently generating about -0.56 per unit of risk. If you would invest  753.00  in Abeona Therapeutics on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Abeona Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.27%
Values	Daily Returns

Abeona Therapeutics  vs.  Acorda Therapeutics

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.

Acorda Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acorda Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Abeona Therapeutics and Acorda Therapeutics

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

The idea behind Abeona Therapeutics and Acorda Therapeutics 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.