Correlation Between DBV Technologies and Innate Pharma
Can any of the company-specific risk be diversified away by investing in both DBV Technologies and Innate Pharma 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 DBV Technologies and Innate Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBV Technologies SA and Innate Pharma, you can compare the effects of market volatilities on DBV Technologies and Innate Pharma 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 DBV Technologies with a short position of Innate Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBV Technologies and Innate Pharma.
Diversification Opportunities for DBV Technologies and Innate Pharma
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between DBV and Innate is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies SA and Innate Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innate Pharma and DBV Technologies 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 DBV Technologies SA are associated (or correlated) with Innate Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innate Pharma has no effect on the direction of DBV Technologies i.e., DBV Technologies and Innate Pharma go up and down completely randomly.
Pair Corralation between DBV Technologies and Innate Pharma
Assuming the 90 days trading horizon DBV Technologies SA is expected to generate 7.89 times more return on investment than Innate Pharma. However, DBV Technologies is 7.89 times more volatile than Innate Pharma. It trades about 0.12 of its potential returns per unit of risk. Innate Pharma is currently generating about -0.12 per unit of risk. If you would invest 65.00 in DBV Technologies SA on November 3, 2024 and sell it today you would earn a total of 15.00 from holding DBV Technologies SA or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBV Technologies SA vs. Innate Pharma
Performance |
| Timeline |
| DBV Technologies |
| Innate Pharma |
DBV Technologies and Innate Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBV Technologies and Innate Pharma
The main advantage of trading using opposite DBV Technologies and Innate Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBV Technologies position performs unexpectedly, Innate Pharma 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 Innate Pharma will offset losses from the drop in Innate Pharma's long position.| DBV Technologies vs. Genfit | DBV Technologies vs. Innate Pharma | DBV Technologies vs. Cellectis | DBV Technologies vs. Nanobiotix SA |
| Innate Pharma vs. Genfit | Innate Pharma vs. Nanobiotix SA | Innate Pharma vs. Cellectis | Innate Pharma vs. AB Science SA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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