Correlation Between Innovent Biologics and Oncology Pharma
Can any of the company-specific risk be diversified away by investing in both Innovent Biologics and Oncology Pharma 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 Oncology Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovent Biologics and Oncology Pharma, you can compare the effects of market volatilities on Innovent Biologics and Oncology Pharma 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 Oncology Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovent Biologics and Oncology Pharma.
Diversification Opportunities for Innovent Biologics and Oncology Pharma
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innovent and Oncology is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Innovent Biologics and Oncology Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncology Pharma 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 Oncology Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncology Pharma has no effect on the direction of Innovent Biologics i.e., Innovent Biologics and Oncology Pharma go up and down completely randomly.
Pair Corralation between Innovent Biologics and Oncology Pharma
Assuming the 90 days horizon Innovent Biologics is expected to generate 245.5 times less return on investment than Oncology Pharma. But when comparing it to its historical volatility, Innovent Biologics is 69.78 times less risky than Oncology Pharma. It trades about 0.08 of its potential returns per unit of risk. Oncology Pharma is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Oncology Pharma on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Oncology Pharma or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Innovent Biologics vs. Oncology Pharma
Performance |
| Timeline |
| Innovent Biologics |
| Oncology Pharma |
Innovent Biologics and Oncology Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovent Biologics and Oncology Pharma
The main advantage of trading using opposite Innovent Biologics and Oncology Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovent Biologics position performs unexpectedly, Oncology Pharma 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 Oncology Pharma will offset losses from the drop in Oncology Pharma's long position.| Innovent Biologics vs. Rigel Pharmaceuticals | Innovent Biologics vs. Geron | Innovent Biologics vs. Verastem | Innovent Biologics vs. Immutep Ltd ADR |
| Oncology Pharma vs. Regen BioPharma | Oncology Pharma vs. Regen BioPharma | Oncology Pharma vs. Therapeutic Solutions International | Oncology Pharma vs. Alpha Cognition |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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