Correlation Between Coca Cola and ImmunoGen
Can any of the company-specific risk be diversified away by investing in both Coca Cola and ImmunoGen 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 Coca Cola and ImmunoGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and ImmunoGen, you can compare the effects of market volatilities on Coca Cola and ImmunoGen 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 Coca Cola with a short position of ImmunoGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and ImmunoGen.
Diversification Opportunities for Coca Cola and ImmunoGen
Pay attention - limited upside
The 3 months correlation between Coca and ImmunoGen is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and ImmunoGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmunoGen and Coca Cola 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 The Coca Cola are associated (or correlated) with ImmunoGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmunoGen has no effect on the direction of Coca Cola i.e., Coca Cola and ImmunoGen go up and down completely randomly.
Pair Corralation between Coca Cola and ImmunoGen
Allowing for the 90-day total investment horizon Coca Cola is expected to generate 2.81 times less return on investment than ImmunoGen. But when comparing it to its historical volatility, The Coca Cola is 2.73 times less risky than ImmunoGen. It trades about 0.04 of its potential returns per unit of risk. ImmunoGen is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,781 in ImmunoGen on September 2, 2024 and sell it today you would earn a total of 39.00 from holding ImmunoGen or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
The Coca Cola vs. ImmunoGen
Performance |
| Timeline |
| Coca Cola |
| ImmunoGen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coca Cola and ImmunoGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and ImmunoGen
The main advantage of trading using opposite Coca Cola and ImmunoGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, ImmunoGen 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 ImmunoGen will offset losses from the drop in ImmunoGen's long position.The idea behind The Coca Cola and ImmunoGen 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.| ImmunoGen vs. Madrigal Pharmaceuticals | ImmunoGen vs. TG Therapeutics | ImmunoGen vs. Terns Pharmaceuticals | ImmunoGen vs. Hepion Pharmaceuticals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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