Correlation Between Inventiva and Abivax SA
Can any of the company-specific risk be diversified away by investing in both Inventiva and Abivax 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 Inventiva and Abivax SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva SA and Abivax SA, you can compare the effects of market volatilities on Inventiva and Abivax 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 Inventiva with a short position of Abivax SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and Abivax SA.
Diversification Opportunities for Inventiva and Abivax SA
Good diversification
The 3 months correlation between Inventiva and Abivax is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva SA and Abivax SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abivax SA and Inventiva 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 Inventiva SA are associated (or correlated) with Abivax SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abivax SA has no effect on the direction of Inventiva i.e., Inventiva and Abivax SA go up and down completely randomly.
Pair Corralation between Inventiva and Abivax SA
Assuming the 90 days trading horizon Inventiva SA is expected to generate 0.87 times more return on investment than Abivax SA. However, Inventiva SA is 1.15 times less risky than Abivax SA. It trades about -0.03 of its potential returns per unit of risk. Abivax SA is currently generating about -0.37 per unit of risk. If you would invest 246.00 in Inventiva SA on August 29, 2024 and sell it today you would lose (4.00) from holding Inventiva SA or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventiva SA vs. Abivax SA
Performance |
| Timeline |
| Inventiva SA |
| Abivax SA |
Inventiva and Abivax SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventiva and Abivax SA
The main advantage of trading using opposite Inventiva and Abivax SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva position performs unexpectedly, Abivax 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 Abivax SA will offset losses from the drop in Abivax SA's long position.| Inventiva vs. Gensight Biologics SA | Inventiva vs. Argen X | Inventiva vs. Abivax SA | Inventiva vs. DBV Technologies SA |
| Abivax SA vs. Biomerieux SA | Abivax SA vs. Eurofins Scientific SE | Abivax SA vs. Sartorius Stedim Biotech | Abivax SA vs. SEB 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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