Correlation Between Incyte and Liquidia Technologies
Can any of the company-specific risk be diversified away by investing in both Incyte and Liquidia Technologies 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 Liquidia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incyte and Liquidia Technologies, you can compare the effects of market volatilities on Incyte and Liquidia Technologies 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 Liquidia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incyte and Liquidia Technologies.
Diversification Opportunities for Incyte and Liquidia Technologies
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Incyte and Liquidia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and Liquidia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquidia Technologies 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 Liquidia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquidia Technologies has no effect on the direction of Incyte i.e., Incyte and Liquidia Technologies go up and down completely randomly.
Pair Corralation between Incyte and Liquidia Technologies
Given the investment horizon of 90 days Incyte is expected to generate 1.46 times more return on investment than Liquidia Technologies. However, Incyte is 1.46 times more volatile than Liquidia Technologies. It trades about 0.16 of its potential returns per unit of risk. Liquidia Technologies is currently generating about 0.05 per unit of risk. If you would invest 6,569 in Incyte on August 28, 2024 and sell it today you would earn a total of 783.00 from holding Incyte or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incyte vs. Liquidia Technologies
Performance |
| Timeline |
| Incyte |
| Liquidia Technologies |
Incyte and Liquidia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incyte and Liquidia Technologies
The main advantage of trading using opposite Incyte and Liquidia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incyte position performs unexpectedly, Liquidia Technologies 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 Liquidia Technologies will offset losses from the drop in Liquidia Technologies' long position.| Incyte vs. Alnylam Pharmaceuticals | Incyte vs. United Therapeutics | Incyte vs. Ultragenyx | Incyte vs. Apellis Pharmaceuticals |
| Liquidia Technologies vs. Biomarin Pharmaceutical | Liquidia Technologies vs. Vaxcyte | Liquidia Technologies vs. Legend Biotech Corp | Liquidia Technologies vs. Bio Techne Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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