Correlation Between ImmuPharma PLC and Direct Line
Can any of the company-specific risk be diversified away by investing in both ImmuPharma PLC and Direct Line 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 ImmuPharma PLC and Direct Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ImmuPharma PLC and Direct Line Insurance, you can compare the effects of market volatilities on ImmuPharma PLC and Direct Line 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 ImmuPharma PLC with a short position of Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of ImmuPharma PLC and Direct Line.
Diversification Opportunities for ImmuPharma PLC and Direct Line
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ImmuPharma and Direct is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ImmuPharma PLC and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance and ImmuPharma PLC 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 ImmuPharma PLC are associated (or correlated) with Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of ImmuPharma PLC i.e., ImmuPharma PLC and Direct Line go up and down completely randomly.
Pair Corralation between ImmuPharma PLC and Direct Line
Assuming the 90 days trading horizon ImmuPharma PLC is expected to under-perform the Direct Line. But the stock apears to be less risky and, when comparing its historical volatility, ImmuPharma PLC is 1.7 times less risky than Direct Line. The stock trades about -0.31 of its potential returns per unit of risk. The Direct Line Insurance is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 15,260 in Direct Line Insurance on September 13, 2024 and sell it today you would earn a total of 9,440 from holding Direct Line Insurance or generate 61.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ImmuPharma PLC vs. Direct Line Insurance
Performance |
| Timeline |
| ImmuPharma PLC |
| Direct Line Insurance |
ImmuPharma PLC and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ImmuPharma PLC and Direct Line
The main advantage of trading using opposite ImmuPharma PLC and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ImmuPharma PLC position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| ImmuPharma PLC vs. Home Depot | ImmuPharma PLC vs. River and Mercantile | ImmuPharma PLC vs. Chrysalis Investments | ImmuPharma PLC vs. NVIDIA Corp |
| Direct Line vs. GreenX Metals | Direct Line vs. CleanTech Lithium plc | Direct Line vs. Endeavour Mining Corp | Direct Line vs. Innovative Industrial Properties |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |