Correlation Between Innate Pharma and Europlasma
Can any of the company-specific risk be diversified away by investing in both Innate Pharma and Europlasma 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 Europlasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innate Pharma and Europlasma SA, you can compare the effects of market volatilities on Innate Pharma and Europlasma 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 Europlasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innate Pharma and Europlasma.
Diversification Opportunities for Innate Pharma and Europlasma
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innate and Europlasma is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Innate Pharma and Europlasma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europlasma 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 Europlasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europlasma SA has no effect on the direction of Innate Pharma i.e., Innate Pharma and Europlasma go up and down completely randomly.
Pair Corralation between Innate Pharma and Europlasma
Assuming the 90 days trading horizon Innate Pharma is expected to under-perform the Europlasma. But the stock apears to be less risky and, when comparing its historical volatility, Innate Pharma is 9.16 times less risky than Europlasma. The stock trades about -0.23 of its potential returns per unit of risk. The Europlasma SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 6.81 in Europlasma SA on August 31, 2024 and sell it today you would earn a total of 5.19 from holding Europlasma SA or generate 76.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innate Pharma vs. Europlasma SA
Performance |
| Timeline |
| Innate Pharma |
| Europlasma SA |
Innate Pharma and Europlasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innate Pharma and Europlasma
The main advantage of trading using opposite Innate Pharma and Europlasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innate Pharma position performs unexpectedly, Europlasma 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 Europlasma will offset losses from the drop in Europlasma's long position.| Innate Pharma vs. Genfit | Innate Pharma vs. Nanobiotix SA | Innate Pharma vs. Cellectis | Innate Pharma vs. AB Science 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |