Correlation Between Immatics Biotechnologies and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Immatics Biotechnologies and Puma Biotechnology 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 Immatics Biotechnologies and Puma Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between immatics biotechnologies GmbH and Puma Biotechnology, you can compare the effects of market volatilities on Immatics Biotechnologies and Puma Biotechnology 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 Immatics Biotechnologies with a short position of Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immatics Biotechnologies and Puma Biotechnology.
Diversification Opportunities for Immatics Biotechnologies and Puma Biotechnology
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Immatics and Puma is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding immatics biotechnologies GmbH and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology and Immatics Biotechnologies 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 immatics biotechnologies GmbH are associated (or correlated) with Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Immatics Biotechnologies i.e., Immatics Biotechnologies and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Immatics Biotechnologies and Puma Biotechnology
Assuming the 90 days horizon immatics biotechnologies GmbH is expected to generate 18.77 times more return on investment than Puma Biotechnology. However, Immatics Biotechnologies is 18.77 times more volatile than Puma Biotechnology. It trades about 0.08 of its potential returns per unit of risk. Puma Biotechnology is currently generating about 0.01 per unit of risk. If you would invest 202.00 in immatics biotechnologies GmbH on September 13, 2024 and sell it today you would lose (168.00) from holding immatics biotechnologies GmbH or give up 83.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 83.2% |
| Values | Daily Returns |
immatics biotechnologies GmbH vs. Puma Biotechnology
Performance |
| Timeline |
| Immatics Biotechnologies |
| Puma Biotechnology |
Immatics Biotechnologies and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immatics Biotechnologies and Puma Biotechnology
The main advantage of trading using opposite Immatics Biotechnologies and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immatics Biotechnologies position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.The idea behind immatics biotechnologies GmbH and Puma Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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