Correlation Between Intercept Pharmaceuticals and Day One

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

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

Diversification Opportunities for Intercept Pharmaceuticals and Day One

-0.02

Correlation Coefficient

Intercept Pharmaceuticals  Day One

Good diversification

The 3 months correlation between Intercept and Day is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Intercept Pharmaceuticals and Day One Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day One Biopharmaceu and Intercept Pharmaceuticals 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 Intercept Pharmaceuticals are associated (or correlated) with Day One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day One Biopharmaceu has no effect on the direction of Intercept Pharmaceuticals i.e., Intercept Pharmaceuticals and Day One go up and down completely randomly.

Pair Corralation between Intercept Pharmaceuticals and Day One

If you would invest  1,420  in Day One Biopharmaceuticals on February 4, 2024 and sell it today you would earn a total of  337.00  from holding Day One Biopharmaceuticals or generate 23.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Intercept Pharmaceuticals  vs.  Day One Biopharmaceuticals

Intercept Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Day One Biopharmaceu

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Day One Biopharmaceuticals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Day One displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intercept Pharmaceuticals and Day One

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

The idea behind Intercept Pharmaceuticals and Day One Biopharmaceuticals 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.