Correlation Between Inventiva and Eton Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Inventiva and Eton Pharmaceuticals 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 Eton Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva Sa and Eton Pharmaceuticals, you can compare the effects of market volatilities on Inventiva and Eton Pharmaceuticals 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 Eton Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and Eton Pharmaceuticals.
Diversification Opportunities for Inventiva and Eton Pharmaceuticals
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inventiva and Eton is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Eton Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eton Pharmaceuticals 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 Eton Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eton Pharmaceuticals has no effect on the direction of Inventiva i.e., Inventiva and Eton Pharmaceuticals go up and down completely randomly.
Pair Corralation between Inventiva and Eton Pharmaceuticals
Considering the 90-day investment horizon Inventiva Sa is expected to under-perform the Eton Pharmaceuticals. In addition to that, Inventiva is 1.41 times more volatile than Eton Pharmaceuticals. It trades about -0.01 of its total potential returns per unit of risk. Eton Pharmaceuticals is currently generating about 0.14 per unit of volatility. If you would invest 373.00 in Eton Pharmaceuticals on August 24, 2024 and sell it today you would earn a total of 702.00 from holding Eton Pharmaceuticals or generate 188.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventiva Sa vs. Eton Pharmaceuticals
Performance |
| Timeline |
| Inventiva Sa |
| Eton Pharmaceuticals |
Inventiva and Eton Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventiva and Eton Pharmaceuticals
The main advantage of trading using opposite Inventiva and Eton Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva position performs unexpectedly, Eton Pharmaceuticals 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 Eton Pharmaceuticals will offset losses from the drop in Eton Pharmaceuticals' long position.| Inventiva vs. Mineralys Therapeutics, Common | Inventiva vs. Eliem Therapeutics | Inventiva vs. Anebulo Pharmaceuticals | Inventiva vs. Janux Therapeutics |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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