Correlation Between Compass Therapeutics and Inventiva
Can any of the company-specific risk be diversified away by investing in both Compass Therapeutics and Inventiva 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 Compass Therapeutics and Inventiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Therapeutics and Inventiva Sa, you can compare the effects of market volatilities on Compass Therapeutics and Inventiva 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 Compass Therapeutics with a short position of Inventiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Therapeutics and Inventiva.
Diversification Opportunities for Compass Therapeutics and Inventiva
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compass and Inventiva is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Compass Therapeutics and Inventiva Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventiva Sa and Compass 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 Compass Therapeutics are associated (or correlated) with Inventiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventiva Sa has no effect on the direction of Compass Therapeutics i.e., Compass Therapeutics and Inventiva go up and down completely randomly.
Pair Corralation between Compass Therapeutics and Inventiva
Given the investment horizon of 90 days Compass Therapeutics is expected to generate 1.04 times more return on investment than Inventiva. However, Compass Therapeutics is 1.04 times more volatile than Inventiva Sa. It trades about 0.04 of its potential returns per unit of risk. Inventiva Sa is currently generating about -0.01 per unit of risk. If you would invest 125.00 in Compass Therapeutics on August 29, 2024 and sell it today you would earn a total of 26.00 from holding Compass Therapeutics or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Therapeutics vs. Inventiva Sa
Performance |
| Timeline |
| Compass Therapeutics |
| Inventiva Sa |
Compass Therapeutics and Inventiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Therapeutics and Inventiva
The main advantage of trading using opposite Compass Therapeutics and Inventiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Therapeutics position performs unexpectedly, Inventiva 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 Inventiva will offset losses from the drop in Inventiva's long position.| Compass Therapeutics vs. Ideaya Biosciences | Compass Therapeutics vs. AnaptysBio | Compass Therapeutics vs. MeiraGTx Holdings PLC | Compass Therapeutics vs. Keros Therapeutics |
| Inventiva vs. Mineralys Therapeutics, Common | Inventiva vs. Eliem Therapeutics | Inventiva vs. Anebulo Pharmaceuticals | Inventiva vs. Janux 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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