Correlation Between Affimed NV and Leap Therapeutics
Can any of the company-specific risk be diversified away by investing in both Affimed NV and Leap 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 Affimed NV and Leap Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affimed NV and Leap Therapeutics, you can compare the effects of market volatilities on Affimed NV and Leap 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 Affimed NV with a short position of Leap Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affimed NV and Leap Therapeutics.
Diversification Opportunities for Affimed NV and Leap Therapeutics
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Affimed and Leap is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Affimed NV and Leap Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leap Therapeutics and Affimed NV 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 Affimed NV are associated (or correlated) with Leap Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leap Therapeutics has no effect on the direction of Affimed NV i.e., Affimed NV and Leap Therapeutics go up and down completely randomly.
Pair Corralation between Affimed NV and Leap Therapeutics
Given the investment horizon of 90 days Affimed NV is expected to under-perform the Leap Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Affimed NV is 1.47 times less risky than Leap Therapeutics. The stock trades about -0.22 of its potential returns per unit of risk. The Leap Therapeutics is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Leap Therapeutics on August 24, 2024 and sell it today you would lose (48.00) from holding Leap Therapeutics or give up 15.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affimed NV vs. Leap Therapeutics
Performance |
| Timeline |
| Affimed NV |
| Leap Therapeutics |
Affimed NV and Leap Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affimed NV and Leap Therapeutics
The main advantage of trading using opposite Affimed NV and Leap Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affimed NV position performs unexpectedly, Leap 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 Leap Therapeutics will offset losses from the drop in Leap Therapeutics' long position.| Affimed NV vs. Lyra Therapeutics | Affimed NV vs. Hookipa Pharma | Affimed NV vs. Cingulate Warrants | Affimed NV vs. SAB Biotherapeutics |
| Leap Therapeutics vs. X4 Pharmaceuticals | Leap Therapeutics vs. Terns Pharmaceuticals | Leap Therapeutics vs. Day One Biopharmaceuticals | Leap Therapeutics vs. PDS Biotechnology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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