Correlation Between NewAmsterdam Pharma and Adaptimmune Therapeutics
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma and Adaptimmune Therapeutics 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 NewAmsterdam Pharma and Adaptimmune Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and Adaptimmune Therapeutics Plc, you can compare the effects of market volatilities on NewAmsterdam Pharma and Adaptimmune Therapeutics 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 NewAmsterdam Pharma with a short position of Adaptimmune Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Adaptimmune Therapeutics.
Diversification Opportunities for NewAmsterdam Pharma and Adaptimmune Therapeutics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NewAmsterdam and Adaptimmune is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and Adaptimmune Therapeutics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptimmune Therapeutics and NewAmsterdam Pharma 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 NewAmsterdam Pharma are associated (or correlated) with Adaptimmune Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptimmune Therapeutics has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Adaptimmune Therapeutics go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Adaptimmune Therapeutics
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to under-perform the Adaptimmune Therapeutics. In addition to that, NewAmsterdam Pharma is 1.14 times more volatile than Adaptimmune Therapeutics Plc. It trades about -0.37 of its total potential returns per unit of risk. Adaptimmune Therapeutics Plc is currently generating about -0.02 per unit of volatility. If you would invest 58.00 in Adaptimmune Therapeutics Plc on November 28, 2024 and sell it today you would lose (1.00) from holding Adaptimmune Therapeutics Plc or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Adaptimmune Therapeutics Plc
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Adaptimmune Therapeutics |
NewAmsterdam Pharma and Adaptimmune Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Adaptimmune Therapeutics
The main advantage of trading using opposite NewAmsterdam Pharma and Adaptimmune Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma position performs unexpectedly, Adaptimmune Therapeutics 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 Adaptimmune Therapeutics will offset losses from the drop in Adaptimmune Therapeutics' long position.| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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