Correlation Between ContraFect and ESSA Pharma

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

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

Diversification Opportunities for ContraFect and ESSA Pharma

0.0

Correlation Coefficient

ContraFect  ESSA Pharma

Pay attention - limited upside

The 3 months correlation between ContraFect and ESSA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ContraFect and ESSA Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSA Pharma and ContraFect 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 ContraFect are associated (or correlated) with ESSA Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSA Pharma has no effect on the direction of ContraFect i.e., ContraFect and ESSA Pharma go up and down completely randomly.

Pair Corralation between ContraFect and ESSA Pharma

If you would invest  177.00  in ESSA Pharma on April 25, 2025 and sell it today you would earn a total of  10.00  from holding ESSA Pharma or generate 5.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ContraFect  vs.  ESSA Pharma

ContraFect

Risk-Adjusted Performance

Very Weak

Over the last 90 days ContraFect has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ContraFect is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

ESSA Pharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ESSA Pharma are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, ESSA Pharma may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ContraFect and ESSA Pharma

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

The idea behind ContraFect and ESSA Pharma 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.