Correlation Between Axsome Therapeutics and Apellis Pharmaceuticals

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

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

Diversification Opportunities for Axsome Therapeutics and Apellis Pharmaceuticals

0.48

Correlation Coefficient

Axsome Therapeutics  Apellis Pharmaceuticals

Very weak diversification

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

Pair Corralation between Axsome Therapeutics and Apellis Pharmaceuticals

Given the investment horizon of 90 days Axsome Therapeutics is expected to under-perform the Apellis Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Axsome Therapeutics is 1.61 times less risky than Apellis Pharmaceuticals. The stock trades about -0.07 of its potential returns per unit of risk. The Apellis Pharmaceuticals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,034  in Apellis Pharmaceuticals on May 2, 2025 and sell it today you would lose (134.00) from holding Apellis Pharmaceuticals or give up 6.59% of portfolio value over 90 days.

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

Axsome Therapeutics  vs.  Apellis Pharmaceuticals

Axsome Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axsome Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Apellis Pharmaceuticals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Axsome Therapeutics and Apellis Pharmaceuticals

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

The idea behind Axsome Therapeutics and Apellis 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.