Correlation Between INmune Bio and Cyclo Therapeutics
Can any of the company-specific risk be diversified away by investing in both INmune Bio and Cyclo 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 INmune Bio and Cyclo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INmune Bio and Cyclo Therapeutics, you can compare the effects of market volatilities on INmune Bio and Cyclo 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 INmune Bio with a short position of Cyclo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of INmune Bio and Cyclo Therapeutics.
Diversification Opportunities for INmune Bio and Cyclo Therapeutics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INmune and Cyclo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding INmune Bio and Cyclo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclo Therapeutics and INmune Bio 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 INmune Bio are associated (or correlated) with Cyclo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclo Therapeutics has no effect on the direction of INmune Bio i.e., INmune Bio and Cyclo Therapeutics go up and down completely randomly.
Pair Corralation between INmune Bio and Cyclo Therapeutics
Given the investment horizon of 90 days INmune Bio is expected to under-perform the Cyclo Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, INmune Bio is 1.01 times less risky than Cyclo Therapeutics. The stock trades about -0.05 of its potential returns per unit of risk. The Cyclo Therapeutics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 159.00 in Cyclo Therapeutics on August 25, 2024 and sell it today you would lose (86.00) from holding Cyclo Therapeutics or give up 54.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INmune Bio vs. Cyclo Therapeutics
Performance |
| Timeline |
| INmune Bio |
| Cyclo Therapeutics |
INmune Bio and Cyclo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INmune Bio and Cyclo Therapeutics
The main advantage of trading using opposite INmune Bio and Cyclo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INmune Bio position performs unexpectedly, Cyclo 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 Cyclo Therapeutics will offset losses from the drop in Cyclo Therapeutics' long position.| INmune Bio vs. Eliem Therapeutics | INmune Bio vs. HCW Biologics | INmune Bio vs. Scpharmaceuticals | INmune Bio vs. Milestone Pharmaceuticals |
| Cyclo Therapeutics vs. Lifecore Biomedical | Cyclo Therapeutics vs. Alpha Teknova | Cyclo Therapeutics vs. Petros Pharmaceuticals | Cyclo Therapeutics vs. Phibro Animal Health |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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