Correlation Between Incyte and CytomX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Incyte and CytomX Therapeutics 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 Incyte and CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incyte and CytomX Therapeutics, you can compare the effects of market volatilities on Incyte and CytomX Therapeutics 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 Incyte with a short position of CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incyte and CytomX Therapeutics.
Diversification Opportunities for Incyte and CytomX Therapeutics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Incyte and CytomX is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics and Incyte 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 Incyte are associated (or correlated) with CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Incyte i.e., Incyte and CytomX Therapeutics go up and down completely randomly.
Pair Corralation between Incyte and CytomX Therapeutics
Given the investment horizon of 90 days Incyte is expected to generate 0.69 times more return on investment than CytomX Therapeutics. However, Incyte is 1.46 times less risky than CytomX Therapeutics. It trades about 0.08 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 6,564 in Incyte on August 28, 2024 and sell it today you would earn a total of 788.00 from holding Incyte or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incyte vs. CytomX Therapeutics
Performance |
| Timeline |
| Incyte |
| CytomX Therapeutics |
Incyte and CytomX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incyte and CytomX Therapeutics
The main advantage of trading using opposite Incyte and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incyte position performs unexpectedly, CytomX Therapeutics 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 CytomX Therapeutics will offset losses from the drop in CytomX Therapeutics' long position.| Incyte vs. Alnylam Pharmaceuticals | Incyte vs. United Therapeutics | Incyte vs. Ultragenyx | Incyte vs. Apellis Pharmaceuticals |
| CytomX Therapeutics vs. Eliem Therapeutics | CytomX Therapeutics vs. HCW Biologics | CytomX Therapeutics vs. Scpharmaceuticals | CytomX Therapeutics vs. Milestone 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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