Correlation Between Aptose Biosciences and Fennec Pharmaceuticals

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

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

Diversification Opportunities for Aptose Biosciences and Fennec Pharmaceuticals

0.11

Correlation Coefficient

Aptose Biosciences  Fennec Pharmaceuticals

Average diversification

The 3 months correlation between Aptose and Fennec is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aptose Biosciences and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals and Aptose Biosciences 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 Aptose Biosciences are associated (or correlated) with Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Aptose Biosciences i.e., Aptose Biosciences and Fennec Pharmaceuticals go up and down completely randomly.

Pair Corralation between Aptose Biosciences and Fennec Pharmaceuticals

Assuming the 90 days trading horizon Aptose Biosciences is expected to generate 12.4 times more return on investment than Fennec Pharmaceuticals. However, Aptose Biosciences is 12.4 times more volatile than Fennec Pharmaceuticals. It trades about 0.03 of its potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about 0.01 per unit of risk. If you would invest  797.00  in Aptose Biosciences on February 26, 2025 and sell it today you would lose (548.00) from holding Aptose Biosciences or give up 68.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.58%
Values	Daily Returns

Aptose Biosciences  vs.  Fennec Pharmaceuticals

Aptose Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aptose Biosciences 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 basic indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Fennec Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fennec Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fennec Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptose Biosciences and Fennec Pharmaceuticals

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

The idea behind Aptose Biosciences and Fennec Pharmaceuticals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.