Correlation Between PepGen and AN2 Therapeutics

Can any of the company-specific risk be diversified away by investing in both PepGen and AN2 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 PepGen and AN2 Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PepGen and AN2 Therapeutics, you can compare the effects of market volatilities on PepGen and AN2 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 PepGen with a short position of AN2 Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepGen and AN2 Therapeutics.

Diversification Opportunities for PepGen and AN2 Therapeutics

0.07

Correlation Coefficient

PepGen  AN2 Therapeutics

Significant diversification

The 3 months correlation between PepGen and AN2 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and AN2 Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AN2 Therapeutics and PepGen 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 PepGen are associated (or correlated) with AN2 Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AN2 Therapeutics has no effect on the direction of PepGen i.e., PepGen and AN2 Therapeutics go up and down completely randomly.

Pair Corralation between PepGen and AN2 Therapeutics

Given the investment horizon of 90 days PepGen is expected to generate 2.11 times more return on investment than AN2 Therapeutics. However, PepGen is 2.11 times more volatile than AN2 Therapeutics. It trades about 0.03 of its potential returns per unit of risk. AN2 Therapeutics is currently generating about -0.17 per unit of risk. If you would invest  147.00  in PepGen on March 2, 2025 and sell it today you would lose (1.00) from holding PepGen or give up 0.68% of portfolio value over 90 days.

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

PepGen  vs.  AN2 Therapeutics

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AN2 Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days AN2 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AN2 Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PepGen and AN2 Therapeutics

The main advantage of trading using opposite PepGen and AN2 Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepGen position performs unexpectedly, AN2 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 AN2 Therapeutics will offset losses from the drop in AN2 Therapeutics' long position.

The idea behind PepGen and AN2 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.