Correlation Between Terns Pharmaceuticals and ImmunoGen
Can any of the company-specific risk be diversified away by investing in both Terns Pharmaceuticals and ImmunoGen 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 Terns Pharmaceuticals and ImmunoGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terns Pharmaceuticals and ImmunoGen, you can compare the effects of market volatilities on Terns Pharmaceuticals and ImmunoGen 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 Terns Pharmaceuticals with a short position of ImmunoGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terns Pharmaceuticals and ImmunoGen.
Diversification Opportunities for Terns Pharmaceuticals and ImmunoGen
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Terns and ImmunoGen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Terns Pharmaceuticals and ImmunoGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmunoGen and Terns 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 Terns Pharmaceuticals are associated (or correlated) with ImmunoGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmunoGen has no effect on the direction of Terns Pharmaceuticals i.e., Terns Pharmaceuticals and ImmunoGen go up and down completely randomly.
Pair Corralation between Terns Pharmaceuticals and ImmunoGen
Given the investment horizon of 90 days Terns Pharmaceuticals is expected to generate 9.91 times less return on investment than ImmunoGen. But when comparing it to its historical volatility, Terns Pharmaceuticals is 2.13 times less risky than ImmunoGen. It trades about 0.02 of its potential returns per unit of risk. ImmunoGen is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 547.00 in ImmunoGen on August 23, 2024 and sell it today you would earn a total of 1,273 from holding ImmunoGen or generate 232.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.26% |
| Values | Daily Returns |
Terns Pharmaceuticals vs. ImmunoGen
Performance |
| Timeline |
| Terns Pharmaceuticals |
| ImmunoGen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Terns Pharmaceuticals and ImmunoGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terns Pharmaceuticals and ImmunoGen
The main advantage of trading using opposite Terns Pharmaceuticals and ImmunoGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terns Pharmaceuticals position performs unexpectedly, ImmunoGen 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 ImmunoGen will offset losses from the drop in ImmunoGen's long position.| Terns Pharmaceuticals vs. Kiora Pharmaceuticals | Terns Pharmaceuticals vs. ZyVersa Therapeutics | Terns Pharmaceuticals vs. Sonnet Biotherapeutics Holdings | Terns Pharmaceuticals vs. Zura Bio Limited |
| ImmunoGen vs. Madrigal Pharmaceuticals | ImmunoGen vs. TG Therapeutics | ImmunoGen vs. Terns Pharmaceuticals | ImmunoGen vs. Hepion 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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