Correlation Between DBV Technologies and Abeona Therapeutics

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

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

Diversification Opportunities for DBV Technologies and Abeona Therapeutics

-0.31

Correlation Coefficient

DBV Technologies  Abeona Therapeutics

Very good diversification

The 3 months correlation between DBV and Abeona is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and DBV Technologies 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 DBV Technologies are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of DBV Technologies i.e., DBV Technologies and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between DBV Technologies and Abeona Therapeutics

Given the investment horizon of 90 days DBV Technologies is expected to generate 0.3 times more return on investment than Abeona Therapeutics. However, DBV Technologies is 3.29 times less risky than Abeona Therapeutics. It trades about -0.14 of its potential returns per unit of risk. Abeona Therapeutics is currently generating about -0.13 per unit of risk. If you would invest  83.00  in DBV Technologies on January 28, 2024 and sell it today you would lose (15.00) from holding DBV Technologies or give up 18.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DBV Technologies  vs.  Abeona Therapeutics

DBV Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DBV Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Abeona Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DBV Technologies and Abeona Therapeutics

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

The idea behind DBV Technologies and Abeona 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.