Correlation Between ImmunoCellular Therapeutics and Brickell Biotech
Can any of the company-specific risk be diversified away by investing in both ImmunoCellular Therapeutics and Brickell Biotech 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 ImmunoCellular Therapeutics and Brickell Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ImmunoCellular Therapeutics and Brickell Biotech, you can compare the effects of market volatilities on ImmunoCellular Therapeutics and Brickell Biotech 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 ImmunoCellular Therapeutics with a short position of Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ImmunoCellular Therapeutics and Brickell Biotech.
Diversification Opportunities for ImmunoCellular Therapeutics and Brickell Biotech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ImmunoCellular and Brickell is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ImmunoCellular Therapeutics and Brickell Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech and ImmunoCellular 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 ImmunoCellular Therapeutics are associated (or correlated) with Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of ImmunoCellular Therapeutics i.e., ImmunoCellular Therapeutics and Brickell Biotech go up and down completely randomly.
Pair Corralation between ImmunoCellular Therapeutics and Brickell Biotech
If you would invest 88.00 in Brickell Biotech on January 26, 2024 and sell it today you would earn a total of 2.00 from holding Brickell Biotech or generate 2.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 5.26% |
Values | Daily Returns |
ImmunoCellular Therapeutics vs. Brickell Biotech
Performance |
Timeline |
ImmunoCellular Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brickell Biotech |
ImmunoCellular Therapeutics and Brickell Biotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ImmunoCellular Therapeutics and Brickell Biotech
The main advantage of trading using opposite ImmunoCellular Therapeutics and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ImmunoCellular Therapeutics position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.The idea behind ImmunoCellular Therapeutics and Brickell Biotech 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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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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