Correlation Between Innate Pharma and Biophytis
Can any of the company-specific risk be diversified away by investing in both Innate Pharma and Biophytis 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 Innate Pharma and Biophytis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innate Pharma and Biophytis SA, you can compare the effects of market volatilities on Innate Pharma and Biophytis 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 Innate Pharma with a short position of Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innate Pharma and Biophytis.
Diversification Opportunities for Innate Pharma and Biophytis
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innate and Biophytis is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Innate Pharma and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis SA and Innate Pharma 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 Innate Pharma are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis SA has no effect on the direction of Innate Pharma i.e., Innate Pharma and Biophytis go up and down completely randomly.
Pair Corralation between Innate Pharma and Biophytis
Assuming the 90 days trading horizon Innate Pharma is expected to generate 0.64 times more return on investment than Biophytis. However, Innate Pharma is 1.57 times less risky than Biophytis. It trades about -0.01 of its potential returns per unit of risk. Biophytis SA is currently generating about -0.05 per unit of risk. If you would invest 253.00 in Innate Pharma on November 28, 2024 and sell it today you would lose (37.00) from holding Innate Pharma or give up 14.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innate Pharma vs. Biophytis SA
Performance |
| Timeline |
| Innate Pharma |
| Biophytis SA |
Innate Pharma and Biophytis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innate Pharma and Biophytis
The main advantage of trading using opposite Innate Pharma and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innate Pharma position performs unexpectedly, Biophytis 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 Biophytis will offset losses from the drop in Biophytis' long position.| Innate Pharma vs. Genfit | Innate Pharma vs. Nanobiotix SA | Innate Pharma vs. Cellectis | Innate Pharma vs. AB Science SA |
| Biophytis vs. Novacyt | Biophytis vs. Biosynex | Biophytis vs. Neovacs SA | Biophytis vs. Quantum Genomics SA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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