Correlation Between Milestone Pharmaceuticals and INmune Bio
Can any of the company-specific risk be diversified away by investing in both Milestone Pharmaceuticals and INmune Bio 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 Milestone Pharmaceuticals and INmune Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Milestone Pharmaceuticals and INmune Bio, you can compare the effects of market volatilities on Milestone Pharmaceuticals and INmune Bio 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 Milestone Pharmaceuticals with a short position of INmune Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Milestone Pharmaceuticals and INmune Bio.
Diversification Opportunities for Milestone Pharmaceuticals and INmune Bio
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Milestone and INmune is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Milestone Pharmaceuticals and INmune Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INmune Bio and Milestone Pharmaceuticals 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 Milestone Pharmaceuticals are associated (or correlated) with INmune Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INmune Bio has no effect on the direction of Milestone Pharmaceuticals i.e., Milestone Pharmaceuticals and INmune Bio go up and down completely randomly.
Pair Corralation between Milestone Pharmaceuticals and INmune Bio
Given the investment horizon of 90 days Milestone Pharmaceuticals is expected to generate 0.88 times more return on investment than INmune Bio. However, Milestone Pharmaceuticals is 1.14 times less risky than INmune Bio. It trades about 0.28 of its potential returns per unit of risk. INmune Bio is currently generating about -0.04 per unit of risk. If you would invest 143.00 in Milestone Pharmaceuticals on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Milestone Pharmaceuticals or generate 28.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Milestone Pharmaceuticals vs. INmune Bio
Performance |
| Timeline |
| Milestone Pharmaceuticals |
| INmune Bio |
Milestone Pharmaceuticals and INmune Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Milestone Pharmaceuticals and INmune Bio
The main advantage of trading using opposite Milestone Pharmaceuticals and INmune Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Milestone Pharmaceuticals position performs unexpectedly, INmune Bio 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 INmune Bio will offset losses from the drop in INmune Bio's long position.The idea behind Milestone Pharmaceuticals and INmune Bio 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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