Correlation Between ProQR Therapeutics and Incyte
Can any of the company-specific risk be diversified away by investing in both ProQR Therapeutics 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 ProQR Therapeutics and Incyte into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProQR Therapeutics BV and Incyte, you can compare the effects of market volatilities on ProQR Therapeutics 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 ProQR Therapeutics with a short position of Incyte. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProQR Therapeutics and Incyte.
Diversification Opportunities for ProQR Therapeutics and Incyte
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProQR and Incyte is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ProQR Therapeutics BV and Incyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incyte and ProQR Therapeutics 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 ProQR Therapeutics BV 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 ProQR Therapeutics i.e., ProQR Therapeutics and Incyte go up and down completely randomly.
Pair Corralation between ProQR Therapeutics and Incyte
Given the investment horizon of 90 days ProQR Therapeutics BV is expected to generate 6.31 times more return on investment than Incyte. However, ProQR Therapeutics is 6.31 times more volatile than Incyte. It trades about 0.1 of its potential returns per unit of risk. Incyte is currently generating about 0.08 per unit of risk. If you would invest 198.00 in ProQR Therapeutics BV on August 28, 2024 and sell it today you would earn a total of 156.00 from holding ProQR Therapeutics BV or generate 78.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProQR Therapeutics BV vs. Incyte
Performance |
| Timeline |
| ProQR Therapeutics |
| Incyte |
ProQR Therapeutics and Incyte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProQR Therapeutics and Incyte
The main advantage of trading using opposite ProQR Therapeutics and Incyte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProQR Therapeutics 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.| ProQR Therapeutics vs. Eliem Therapeutics | ProQR Therapeutics vs. HCW Biologics | ProQR Therapeutics vs. Scpharmaceuticals | ProQR Therapeutics vs. Milestone Pharmaceuticals |
| 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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