Correlation Between Adverum Biotechnologies and Adagene

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

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

Diversification Opportunities for Adverum Biotechnologies and Adagene

-0.5

Correlation Coefficient

Adverum Biotechnologies  Adagene

Very good diversification

The 3 months correlation between Adverum and Adagene is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Adverum Biotechnologies and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Adverum Biotechnologies 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 Adverum Biotechnologies are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Adverum Biotechnologies i.e., Adverum Biotechnologies and Adagene go up and down completely randomly.

Pair Corralation between Adverum Biotechnologies and Adagene

Given the investment horizon of 90 days Adverum Biotechnologies is expected to under-perform the Adagene. In addition to that, Adverum Biotechnologies is 1.29 times more volatile than Adagene. It trades about -0.09 of its total potential returns per unit of risk. Adagene is currently generating about 0.09 per unit of volatility. If you would invest  162.00  in Adagene on May 3, 2025 and sell it today you would earn a total of  37.00  from holding Adagene or generate 22.84% return on investment over 90 days.

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

Adverum Biotechnologies  vs.  Adagene

Adverum Biotechnologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adverum Biotechnologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Adagene

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adagene are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adagene reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adverum Biotechnologies and Adagene

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

The idea behind Adverum Biotechnologies and Adagene 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.