Correlation Between Inventiva and Edgewise Therapeutics
Can any of the company-specific risk be diversified away by investing in both Inventiva and Edgewise Therapeutics 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 Edgewise Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva Sa and Edgewise Therapeutics, you can compare the effects of market volatilities on Inventiva and Edgewise Therapeutics 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 Edgewise Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and Edgewise Therapeutics.
Diversification Opportunities for Inventiva and Edgewise Therapeutics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inventiva and Edgewise is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Edgewise Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewise Therapeutics 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 Edgewise Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewise Therapeutics has no effect on the direction of Inventiva i.e., Inventiva and Edgewise Therapeutics go up and down completely randomly.
Pair Corralation between Inventiva and Edgewise Therapeutics
Considering the 90-day investment horizon Inventiva Sa is expected to generate 1.25 times more return on investment than Edgewise Therapeutics. However, Inventiva is 1.25 times more volatile than Edgewise Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Edgewise Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 271.00 in Inventiva Sa on August 24, 2024 and sell it today you would lose (5.00) from holding Inventiva Sa or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventiva Sa vs. Edgewise Therapeutics
Performance |
| Timeline |
| Inventiva Sa |
| Edgewise Therapeutics |
Inventiva and Edgewise Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventiva and Edgewise Therapeutics
The main advantage of trading using opposite Inventiva and Edgewise Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva position performs unexpectedly, Edgewise Therapeutics 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 Edgewise Therapeutics will offset losses from the drop in Edgewise Therapeutics' long position.| Inventiva vs. Mineralys Therapeutics, Common | Inventiva vs. Eliem Therapeutics | Inventiva vs. Anebulo Pharmaceuticals | Inventiva vs. Janux Therapeutics |
| Edgewise Therapeutics vs. Lyra Therapeutics | Edgewise Therapeutics vs. Hookipa Pharma | Edgewise Therapeutics vs. Cingulate Warrants | Edgewise Therapeutics vs. SAB Biotherapeutics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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