Correlation Between Incyte and MannKind Corp
Can any of the company-specific risk be diversified away by investing in both Incyte and MannKind Corp 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 MannKind Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incyte and MannKind Corp, you can compare the effects of market volatilities on Incyte and MannKind Corp 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 MannKind Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incyte and MannKind Corp.
Diversification Opportunities for Incyte and MannKind Corp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Incyte and MannKind is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and MannKind Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MannKind Corp 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 MannKind Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MannKind Corp has no effect on the direction of Incyte i.e., Incyte and MannKind Corp go up and down completely randomly.
Pair Corralation between Incyte and MannKind Corp
Given the investment horizon of 90 days Incyte is expected to generate 1.39 times more return on investment than MannKind Corp. However, Incyte is 1.39 times more volatile than MannKind Corp. It trades about -0.03 of its potential returns per unit of risk. MannKind Corp is currently generating about -0.3 per unit of risk. If you would invest 7,193 in Incyte on November 18, 2024 and sell it today you would lose (151.00) from holding Incyte or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incyte vs. MannKind Corp
Performance |
| Timeline |
| Incyte |
| MannKind Corp |
Incyte and MannKind Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incyte and MannKind Corp
The main advantage of trading using opposite Incyte and MannKind Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incyte position performs unexpectedly, MannKind Corp 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 MannKind Corp will offset losses from the drop in MannKind Corp's long position.| Incyte vs. Alnylam Pharmaceuticals | Incyte vs. United Therapeutics | Incyte vs. Ultragenyx | Incyte vs. Apellis Pharmaceuticals |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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