Correlation Between Adaptimmune Therapeutics and MAIA Biotechnology
Can any of the company-specific risk be diversified away by investing in both Adaptimmune Therapeutics and MAIA Biotechnology 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 Adaptimmune Therapeutics and MAIA Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaptimmune Therapeutics Plc and MAIA Biotechnology, you can compare the effects of market volatilities on Adaptimmune Therapeutics and MAIA Biotechnology 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 Adaptimmune Therapeutics with a short position of MAIA Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaptimmune Therapeutics and MAIA Biotechnology.
Diversification Opportunities for Adaptimmune Therapeutics and MAIA Biotechnology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Adaptimmune and MAIA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Adaptimmune Therapeutics Plc and MAIA Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAIA Biotechnology and Adaptimmune 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 Adaptimmune Therapeutics Plc are associated (or correlated) with MAIA Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAIA Biotechnology has no effect on the direction of Adaptimmune Therapeutics i.e., Adaptimmune Therapeutics and MAIA Biotechnology go up and down completely randomly.
Pair Corralation between Adaptimmune Therapeutics and MAIA Biotechnology
Given the investment horizon of 90 days Adaptimmune Therapeutics Plc is expected to generate 0.45 times more return on investment than MAIA Biotechnology. However, Adaptimmune Therapeutics Plc is 2.24 times less risky than MAIA Biotechnology. It trades about -0.19 of its potential returns per unit of risk. MAIA Biotechnology is currently generating about -0.13 per unit of risk. If you would invest 65.00 in Adaptimmune Therapeutics Plc on November 4, 2024 and sell it today you would lose (6.00) from holding Adaptimmune Therapeutics Plc or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaptimmune Therapeutics Plc vs. MAIA Biotechnology
Performance |
| Timeline |
| Adaptimmune Therapeutics |
| MAIA Biotechnology |
Adaptimmune Therapeutics and MAIA Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaptimmune Therapeutics and MAIA Biotechnology
The main advantage of trading using opposite Adaptimmune Therapeutics and MAIA Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptimmune Therapeutics position performs unexpectedly, MAIA Biotechnology 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 MAIA Biotechnology will offset losses from the drop in MAIA Biotechnology's long position.The idea behind Adaptimmune Therapeutics Plc and MAIA Biotechnology 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.
| MAIA Biotechnology vs. Lineage Cell Therapeutics | MAIA Biotechnology vs. Armata Pharmaceuticals | MAIA Biotechnology vs. Portage Biotech | MAIA Biotechnology vs. Larimar Therapeutics |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |