Correlation Between Fortress Biotech and Intercept Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and Intercept 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 Fortress Biotech and Intercept Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech and Intercept Pharmaceuticals, you can compare the effects of market volatilities on Fortress Biotech and Intercept 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 Fortress Biotech with a short position of Intercept Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and Intercept Pharmaceuticals.
Diversification Opportunities for Fortress Biotech and Intercept Pharmaceuticals
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortress and Intercept is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech and Intercept Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercept Pharmaceuticals and Fortress Biotech 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 Fortress Biotech are associated (or correlated) with Intercept Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercept Pharmaceuticals has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Intercept Pharmaceuticals go up and down completely randomly.
Pair Corralation between Fortress Biotech and Intercept Pharmaceuticals
If you would invest 1,031 in Intercept Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Intercept Pharmaceuticals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Fortress Biotech vs. Intercept Pharmaceuticals
Performance |
| Timeline |
| Fortress Biotech |
| Intercept Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fortress Biotech and Intercept Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Biotech and Intercept Pharmaceuticals
The main advantage of trading using opposite Fortress Biotech and Intercept Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Intercept 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 Intercept Pharmaceuticals will offset losses from the drop in Intercept Pharmaceuticals' long position.| Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Achilles Therapeutics PLC | Fortress Biotech vs. Aptose Biosciences | Fortress Biotech vs. Fortress Biotech Pref |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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