Correlation Between ADC Therapeutics and Innovid Corp
Can any of the company-specific risk be diversified away by investing in both ADC Therapeutics and Innovid Corp 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 Innovid Corp 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 Innovid Corp, you can compare the effects of market volatilities on ADC Therapeutics and Innovid Corp 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 Innovid Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADC Therapeutics and Innovid Corp.
Diversification Opportunities for ADC Therapeutics and Innovid Corp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADC and Innovid is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ADC Therapeutics SA and Innovid Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovid Corp 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 Innovid Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovid Corp has no effect on the direction of ADC Therapeutics i.e., ADC Therapeutics and Innovid Corp go up and down completely randomly.
Pair Corralation between ADC Therapeutics and Innovid Corp
Given the investment horizon of 90 days ADC Therapeutics SA is expected to under-perform the Innovid Corp. But the stock apears to be less risky and, when comparing its historical volatility, ADC Therapeutics SA is 4.37 times less risky than Innovid Corp. The stock trades about -0.42 of its potential returns per unit of risk. The Innovid Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Innovid Corp on August 28, 2024 and sell it today you would earn a total of 109.00 from holding Innovid Corp or generate 55.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADC Therapeutics SA vs. Innovid Corp
Performance |
| Timeline |
| ADC Therapeutics |
| Innovid Corp |
ADC Therapeutics and Innovid Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADC Therapeutics and Innovid Corp
The main advantage of trading using opposite ADC Therapeutics and Innovid Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADC Therapeutics position performs unexpectedly, Innovid Corp 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 Innovid Corp will offset losses from the drop in Innovid Corp's long position.| ADC Therapeutics vs. Passage Bio | ADC Therapeutics vs. Black Diamond Therapeutics | ADC Therapeutics vs. Alector | ADC Therapeutics vs. Century Therapeutics |
| Innovid Corp vs. ADTRAN Inc | Innovid Corp vs. Belden Inc | Innovid Corp vs. ADC Therapeutics SA | Innovid Corp vs. Comtech Telecommunications Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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