Correlation Between Innovent Biologics and ImmuCell
Can any of the company-specific risk be diversified away by investing in both Innovent Biologics and ImmuCell 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 Innovent Biologics and ImmuCell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovent Biologics and ImmuCell, you can compare the effects of market volatilities on Innovent Biologics and ImmuCell 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 Innovent Biologics with a short position of ImmuCell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovent Biologics and ImmuCell.
Diversification Opportunities for Innovent Biologics and ImmuCell
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Innovent and ImmuCell is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Innovent Biologics and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and Innovent Biologics 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 Innovent Biologics are associated (or correlated) with ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Innovent Biologics i.e., Innovent Biologics and ImmuCell go up and down completely randomly.
Pair Corralation between Innovent Biologics and ImmuCell
Assuming the 90 days horizon Innovent Biologics is expected to under-perform the ImmuCell. In addition to that, Innovent Biologics is 2.92 times more volatile than ImmuCell. It trades about -0.02 of its total potential returns per unit of risk. ImmuCell is currently generating about 0.11 per unit of volatility. If you would invest 357.00 in ImmuCell on August 29, 2024 and sell it today you would earn a total of 13.00 from holding ImmuCell or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovent Biologics vs. ImmuCell
Performance |
| Timeline |
| Innovent Biologics |
| ImmuCell |
Innovent Biologics and ImmuCell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovent Biologics and ImmuCell
The main advantage of trading using opposite Innovent Biologics and ImmuCell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovent Biologics position performs unexpectedly, ImmuCell 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 ImmuCell will offset losses from the drop in ImmuCell's long position.The idea behind Innovent Biologics and ImmuCell pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ImmuCell vs. Transgene SA | ImmuCell vs. Alpha Cognition | ImmuCell vs. Fennec Pharmaceuticals | ImmuCell vs. Lipella Pharmaceuticals Common |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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