Correlation Between Immunocore Holdings and Terns Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Immunocore Holdings and Terns 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 Immunocore Holdings and Terns Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immunocore Holdings and Terns Pharmaceuticals, you can compare the effects of market volatilities on Immunocore Holdings and Terns 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 Immunocore Holdings with a short position of Terns Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immunocore Holdings and Terns Pharmaceuticals.
Diversification Opportunities for Immunocore Holdings and Terns Pharmaceuticals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Immunocore and Terns is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Immunocore Holdings and Terns Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terns Pharmaceuticals and Immunocore Holdings 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 Immunocore Holdings are associated (or correlated) with Terns Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terns Pharmaceuticals has no effect on the direction of Immunocore Holdings i.e., Immunocore Holdings and Terns Pharmaceuticals go up and down completely randomly.
Pair Corralation between Immunocore Holdings and Terns Pharmaceuticals
Given the investment horizon of 90 days Immunocore Holdings is expected to under-perform the Terns Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Immunocore Holdings is 1.99 times less risky than Terns Pharmaceuticals. The stock trades about -0.04 of its potential returns per unit of risk. The Terns Pharmaceuticals is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 953.00 in Terns Pharmaceuticals on October 25, 2024 and sell it today you would lose (486.00) from holding Terns Pharmaceuticals or give up 51.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immunocore Holdings vs. Terns Pharmaceuticals
Performance |
| Timeline |
| Immunocore Holdings |
| Terns Pharmaceuticals |
Immunocore Holdings and Terns Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immunocore Holdings and Terns Pharmaceuticals
The main advantage of trading using opposite Immunocore Holdings and Terns Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immunocore Holdings position performs unexpectedly, Terns 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 Terns Pharmaceuticals will offset losses from the drop in Terns Pharmaceuticals' long position.| Immunocore Holdings vs. Arcellx | Immunocore Holdings vs. Ventyx Biosciences | Immunocore Holdings vs. Vaxcyte | Immunocore Holdings vs. Nuvalent |
| Terns Pharmaceuticals vs. X4 Pharmaceuticals | Terns Pharmaceuticals vs. Day One Biopharmaceuticals | Terns Pharmaceuticals vs. Hookipa Pharma | Terns Pharmaceuticals vs. Amylyx Pharmaceuticals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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