Correlation Between INmune Bio and Iovance Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both INmune Bio and Iovance Biotherapeutics 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 INmune Bio and Iovance Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INmune Bio and Iovance Biotherapeutics, you can compare the effects of market volatilities on INmune Bio and Iovance Biotherapeutics 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 INmune Bio with a short position of Iovance Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of INmune Bio and Iovance Biotherapeutics.
Diversification Opportunities for INmune Bio and Iovance Biotherapeutics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between INmune and Iovance is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding INmune Bio and Iovance Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iovance Biotherapeutics and INmune Bio 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 INmune Bio are associated (or correlated) with Iovance Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iovance Biotherapeutics has no effect on the direction of INmune Bio i.e., INmune Bio and Iovance Biotherapeutics go up and down completely randomly.
Pair Corralation between INmune Bio and Iovance Biotherapeutics
Given the investment horizon of 90 days INmune Bio is expected to generate 2.06 times more return on investment than Iovance Biotherapeutics. However, INmune Bio is 2.06 times more volatile than Iovance Biotherapeutics. It trades about 0.1 of its potential returns per unit of risk. Iovance Biotherapeutics is currently generating about 0.03 per unit of risk. If you would invest 1,034 in INmune Bio on February 5, 2024 and sell it today you would earn a total of 123.00 from holding INmune Bio or generate 11.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
INmune Bio vs. Iovance Biotherapeutics
Performance |
Timeline |
INmune Bio |
Iovance Biotherapeutics |
INmune Bio and Iovance Biotherapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INmune Bio and Iovance Biotherapeutics
The main advantage of trading using opposite INmune Bio and Iovance Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INmune Bio position performs unexpectedly, Iovance Biotherapeutics 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 Iovance Biotherapeutics will offset losses from the drop in Iovance Biotherapeutics' long position.The idea behind INmune Bio and Iovance Biotherapeutics 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.Iovance Biotherapeutics vs. Quoin Pharmaceuticals Ltd | Iovance Biotherapeutics vs. Morningstar Unconstrained Allocation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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