Correlation Between ADC Therapeutics and Adaptimmune Therapeutics
Can any of the company-specific risk be diversified away by investing in both ADC Therapeutics and Adaptimmune Therapeutics 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 ADC Therapeutics and Adaptimmune Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADC Therapeutics SA and Adaptimmune Therapeutics Plc, you can compare the effects of market volatilities on ADC Therapeutics and Adaptimmune Therapeutics 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 ADC Therapeutics with a short position of Adaptimmune Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADC Therapeutics and Adaptimmune Therapeutics.
Diversification Opportunities for ADC Therapeutics and Adaptimmune Therapeutics
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ADC and Adaptimmune is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ADC Therapeutics SA and Adaptimmune Therapeutics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptimmune Therapeutics and ADC 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 ADC Therapeutics SA are associated (or correlated) with Adaptimmune Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptimmune Therapeutics has no effect on the direction of ADC Therapeutics i.e., ADC Therapeutics and Adaptimmune Therapeutics go up and down completely randomly.
Pair Corralation between ADC Therapeutics and Adaptimmune Therapeutics
Given the investment horizon of 90 days ADC Therapeutics SA is expected to under-perform the Adaptimmune Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, ADC Therapeutics SA is 1.55 times less risky than Adaptimmune Therapeutics. The stock trades about -0.42 of its potential returns per unit of risk. The Adaptimmune Therapeutics Plc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 74.00 in Adaptimmune Therapeutics Plc on August 27, 2024 and sell it today you would lose (8.00) from holding Adaptimmune Therapeutics Plc or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADC Therapeutics SA vs. Adaptimmune Therapeutics Plc
Performance |
| Timeline |
| ADC Therapeutics |
| Adaptimmune Therapeutics |
ADC Therapeutics and Adaptimmune Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADC Therapeutics and Adaptimmune Therapeutics
The main advantage of trading using opposite ADC Therapeutics and Adaptimmune Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADC Therapeutics position performs unexpectedly, Adaptimmune Therapeutics 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 Adaptimmune Therapeutics will offset losses from the drop in Adaptimmune Therapeutics' long position.| ADC Therapeutics vs. Passage Bio | ADC Therapeutics vs. Black Diamond Therapeutics | ADC Therapeutics vs. Alector | ADC Therapeutics vs. Century 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |