Correlation Between Pharmx Technologies and Advanced Braking

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

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

Diversification Opportunities for Pharmx Technologies and Advanced Braking

-0.48

Correlation Coefficient

Pharmx Technologies  Advanced Braking

Very good diversification

The 3 months correlation between Pharmx and Advanced is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pharmx Technologies and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec and Pharmx 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 Pharmx Technologies are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Pharmx Technologies i.e., Pharmx Technologies and Advanced Braking go up and down completely randomly.

Pair Corralation between Pharmx Technologies and Advanced Braking

Assuming the 90 days trading horizon Pharmx Technologies is expected to generate 0.94 times more return on investment than Advanced Braking. However, Pharmx Technologies is 1.06 times less risky than Advanced Braking. It trades about 0.15 of its potential returns per unit of risk. Advanced Braking Technology is currently generating about 0.01 per unit of risk. If you would invest  7.60  in Pharmx Technologies on April 20, 2025 and sell it today you would earn a total of  1.40  from holding Pharmx Technologies or generate 18.42% return on investment over 90 days.

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

Pharmx Technologies  vs.  Advanced Braking Technology

Pharmx Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pharmx Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Pharmx Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Advanced Braking Tec

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pharmx Technologies and Advanced Braking

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

The idea behind Pharmx Technologies and Advanced Braking Technology 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.