Correlation Between BridgeBio Pharma and Inovio Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both BridgeBio Pharma and Inovio Pharmaceuticals 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 BridgeBio Pharma and Inovio Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BridgeBio Pharma and Inovio Pharmaceuticals, you can compare the effects of market volatilities on BridgeBio Pharma and Inovio Pharmaceuticals 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 BridgeBio Pharma with a short position of Inovio Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BridgeBio Pharma and Inovio Pharmaceuticals.
Diversification Opportunities for BridgeBio Pharma and Inovio Pharmaceuticals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BridgeBio and Inovio is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BridgeBio Pharma and Inovio Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inovio Pharmaceuticals and BridgeBio Pharma 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 BridgeBio Pharma are associated (or correlated) with Inovio Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inovio Pharmaceuticals has no effect on the direction of BridgeBio Pharma i.e., BridgeBio Pharma and Inovio Pharmaceuticals go up and down completely randomly.
Pair Corralation between BridgeBio Pharma and Inovio Pharmaceuticals
Given the investment horizon of 90 days BridgeBio Pharma is expected to under-perform the Inovio Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, BridgeBio Pharma is 1.53 times less risky than Inovio Pharmaceuticals. The stock trades about -0.01 of its potential returns per unit of risk. The Inovio Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 456.00 in Inovio Pharmaceuticals on September 3, 2024 and sell it today you would lose (21.00) from holding Inovio Pharmaceuticals or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BridgeBio Pharma vs. Inovio Pharmaceuticals
Performance |
| Timeline |
| BridgeBio Pharma |
| Inovio Pharmaceuticals |
BridgeBio Pharma and Inovio Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BridgeBio Pharma and Inovio Pharmaceuticals
The main advantage of trading using opposite BridgeBio Pharma and Inovio Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BridgeBio Pharma position performs unexpectedly, Inovio Pharmaceuticals 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 Inovio Pharmaceuticals will offset losses from the drop in Inovio Pharmaceuticals' long position.| BridgeBio Pharma vs. Blueprint Medicines Corp | BridgeBio Pharma vs. Amylyx Pharmaceuticals | BridgeBio Pharma vs. Day One Biopharmaceuticals | BridgeBio Pharma vs. Terns Pharmaceuticals |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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