Correlation Between ImmunoCellular Therapeutics and Biotron
Can any of the company-specific risk be diversified away by investing in both ImmunoCellular Therapeutics and Biotron 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 ImmunoCellular Therapeutics and Biotron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ImmunoCellular Therapeutics and Biotron Limited, you can compare the effects of market volatilities on ImmunoCellular Therapeutics and Biotron 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 ImmunoCellular Therapeutics with a short position of Biotron. Check out your portfolio center. Please also check ongoing floating volatility patterns of ImmunoCellular Therapeutics and Biotron.
Diversification Opportunities for ImmunoCellular Therapeutics and Biotron
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ImmunoCellular and Biotron is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ImmunoCellular Therapeutics and Biotron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotron Limited and ImmunoCellular Therapeutics 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 ImmunoCellular Therapeutics are associated (or correlated) with Biotron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotron Limited has no effect on the direction of ImmunoCellular Therapeutics i.e., ImmunoCellular Therapeutics and Biotron go up and down completely randomly.
Pair Corralation between ImmunoCellular Therapeutics and Biotron
Given the investment horizon of 90 days ImmunoCellular Therapeutics is expected to under-perform the Biotron. But the pink sheet apears to be less risky and, when comparing its historical volatility, ImmunoCellular Therapeutics is 3.63 times less risky than Biotron. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Biotron Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.94 in Biotron Limited on August 31, 2024 and sell it today you would lose (0.69) from holding Biotron Limited or give up 35.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.28% |
| Values | Daily Returns |
ImmunoCellular Therapeutics vs. Biotron Limited
Performance |
| Timeline |
| ImmunoCellular Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Biotron Limited |
ImmunoCellular Therapeutics and Biotron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ImmunoCellular Therapeutics and Biotron
The main advantage of trading using opposite ImmunoCellular Therapeutics and Biotron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ImmunoCellular Therapeutics position performs unexpectedly, Biotron 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 Biotron will offset losses from the drop in Biotron's long position.The idea behind ImmunoCellular Therapeutics and Biotron Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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