Correlation Between Puma Biotechnology and Intercept Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Puma Biotechnology and Intercept Pharmaceuticals 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 Puma Biotechnology and Intercept Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Biotechnology and Intercept Pharmaceuticals, you can compare the effects of market volatilities on Puma Biotechnology and Intercept Pharmaceuticals 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 Puma Biotechnology with a short position of Intercept Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Biotechnology and Intercept Pharmaceuticals.
Diversification Opportunities for Puma Biotechnology and Intercept Pharmaceuticals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puma and Intercept is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Puma Biotechnology and Intercept Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercept Pharmaceuticals and Puma Biotechnology 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 Puma Biotechnology are associated (or correlated) with Intercept Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercept Pharmaceuticals has no effect on the direction of Puma Biotechnology i.e., Puma Biotechnology and Intercept Pharmaceuticals go up and down completely randomly.
Pair Corralation between Puma Biotechnology and Intercept Pharmaceuticals
If you would invest 238.00 in Puma Biotechnology on November 2, 2024 and sell it today you would earn a total of 69.00 from holding Puma Biotechnology or generate 28.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.97% |
| Values | Daily Returns |
Puma Biotechnology vs. Intercept Pharmaceuticals
Performance |
| Timeline |
| Puma Biotechnology |
| Intercept Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Puma Biotechnology and Intercept Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Biotechnology and Intercept Pharmaceuticals
The main advantage of trading using opposite Puma Biotechnology and Intercept Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Biotechnology position performs unexpectedly, Intercept Pharmaceuticals 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 Intercept Pharmaceuticals will offset losses from the drop in Intercept Pharmaceuticals' long position.| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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