Correlation Between Innate Pharma and Neovacs SA
Can any of the company-specific risk be diversified away by investing in both Innate Pharma and Neovacs SA 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 Neovacs SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innate Pharma and Neovacs SA, you can compare the effects of market volatilities on Innate Pharma and Neovacs SA 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 Neovacs SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innate Pharma and Neovacs SA.
Diversification Opportunities for Innate Pharma and Neovacs SA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innate and Neovacs is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Innate Pharma and Neovacs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neovacs 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 Neovacs SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neovacs SA has no effect on the direction of Innate Pharma i.e., Innate Pharma and Neovacs SA go up and down completely randomly.
Pair Corralation between Innate Pharma and Neovacs SA
Assuming the 90 days trading horizon Innate Pharma is expected to generate 0.2 times more return on investment than Neovacs SA. However, Innate Pharma is 4.89 times less risky than Neovacs SA. It trades about -0.34 of its potential returns per unit of risk. Neovacs SA is currently generating about -0.58 per unit of risk. If you would invest 192.00 in Innate Pharma on October 25, 2024 and sell it today you would lose (18.00) from holding Innate Pharma or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innate Pharma vs. Neovacs SA
Performance |
| Timeline |
| Innate Pharma |
| Neovacs SA |
Innate Pharma and Neovacs SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innate Pharma and Neovacs SA
The main advantage of trading using opposite Innate Pharma and Neovacs SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innate Pharma position performs unexpectedly, Neovacs SA 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 Neovacs SA will offset losses from the drop in Neovacs SA's long position.| Innate Pharma vs. Genfit | Innate Pharma vs. Nanobiotix SA | Innate Pharma vs. Cellectis | Innate Pharma vs. AB Science SA |
| Neovacs SA vs. Europlasma SA | Neovacs SA vs. Biophytis SA | Neovacs SA vs. Cellectis | Neovacs SA vs. Innate Pharma |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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