Correlation Between Iovance Biotherapeutics and Entera Bio
Can any of the company-specific risk be diversified away by investing in both Iovance Biotherapeutics and Entera Bio 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 Iovance Biotherapeutics and Entera Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iovance Biotherapeutics and Entera Bio, you can compare the effects of market volatilities on Iovance Biotherapeutics and Entera Bio 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 Iovance Biotherapeutics with a short position of Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iovance Biotherapeutics and Entera Bio.
Diversification Opportunities for Iovance Biotherapeutics and Entera Bio
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iovance and Entera is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio and Iovance Biotherapeutics 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 Iovance Biotherapeutics are associated (or correlated) with Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Entera Bio go up and down completely randomly.
Pair Corralation between Iovance Biotherapeutics and Entera Bio
Given the investment horizon of 90 days Iovance Biotherapeutics is expected to under-perform the Entera Bio. But the stock apears to be less risky and, when comparing its historical volatility, Iovance Biotherapeutics is 1.48 times less risky than Entera Bio. The stock trades about -0.24 of its potential returns per unit of risk. The Entera Bio is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Entera Bio on October 20, 2024 and sell it today you would earn a total of 18.00 from holding Entera Bio or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iovance Biotherapeutics vs. Entera Bio
Performance |
| Timeline |
| Iovance Biotherapeutics |
| Entera Bio |
Iovance Biotherapeutics and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iovance Biotherapeutics and Entera Bio
The main advantage of trading using opposite Iovance Biotherapeutics and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iovance Biotherapeutics position performs unexpectedly, Entera Bio 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| Iovance Biotherapeutics vs. PTC Therapeutics | Iovance Biotherapeutics vs. Krystal Biotech | Iovance Biotherapeutics vs. Sarepta Therapeutics | Iovance Biotherapeutics vs. Madrigal Pharmaceuticals |
| Entera Bio vs. NLS Pharmaceutics AG | Entera Bio vs. Alterity Therapeutics | Entera Bio vs. Immutep Ltd ADR |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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