Correlation Between Editas Medicine and Auris Medical

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

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

Diversification Opportunities for Editas Medicine and Auris Medical

0.0

Correlation Coefficient

Editas Medicine  Auris Medical

Pay attention - limited upside

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

Pair Corralation between Editas Medicine and Auris Medical

If you would invest (100.00) in Auris Medical Holding on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Auris Medical Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Editas Medicine  vs.  Auris Medical Holding

Editas Medicine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Editas Medicine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward 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.

Auris Medical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auris Medical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Auris Medical is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Editas Medicine and Auris Medical

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

The idea behind Editas Medicine and Auris Medical Holding 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.

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 the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.