Correlation Between MannKind Corp and Incyte
Can any of the company-specific risk be diversified away by investing in both MannKind Corp and Incyte 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 MannKind Corp and Incyte into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MannKind Corp and Incyte, you can compare the effects of market volatilities on MannKind Corp and Incyte 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 MannKind Corp with a short position of Incyte. Check out your portfolio center. Please also check ongoing floating volatility patterns of MannKind Corp and Incyte.
Diversification Opportunities for MannKind Corp and Incyte
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MannKind and Incyte is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding MannKind Corp and Incyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incyte and MannKind Corp 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 MannKind Corp are associated (or correlated) with Incyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incyte has no effect on the direction of MannKind Corp i.e., MannKind Corp and Incyte go up and down completely randomly.
Pair Corralation between MannKind Corp and Incyte
Given the investment horizon of 90 days MannKind Corp is expected to under-perform the Incyte. But the stock apears to be less risky and, when comparing its historical volatility, MannKind Corp is 2.34 times less risky than Incyte. The stock trades about -0.04 of its potential returns per unit of risk. The Incyte is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,569 in Incyte on August 28, 2024 and sell it today you would earn a total of 783.00 from holding Incyte or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MannKind Corp vs. Incyte
Performance |
| Timeline |
| MannKind Corp |
| Incyte |
MannKind Corp and Incyte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MannKind Corp and Incyte
The main advantage of trading using opposite MannKind Corp and Incyte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MannKind Corp position performs unexpectedly, Incyte 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 Incyte will offset losses from the drop in Incyte's long position.| MannKind Corp vs. Biomarin Pharmaceutical | MannKind Corp vs. Vaxcyte | MannKind Corp vs. Liquidia Technologies | MannKind Corp vs. Legend Biotech Corp |
| Incyte vs. Alnylam Pharmaceuticals | Incyte vs. United Therapeutics | Incyte vs. Ultragenyx | Incyte vs. Apellis 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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