Correlation Between Viking Therapeutics and Iovance Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics and Iovance Biotherapeutics 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 Viking Therapeutics and Iovance Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Therapeutics and Iovance Biotherapeutics, you can compare the effects of market volatilities on Viking Therapeutics and Iovance Biotherapeutics 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 Viking Therapeutics with a short position of Iovance Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and Iovance Biotherapeutics.
Diversification Opportunities for Viking Therapeutics and Iovance Biotherapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Viking and Iovance is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Iovance Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iovance Biotherapeutics and Viking 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 Viking Therapeutics are associated (or correlated) with Iovance Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iovance Biotherapeutics has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Iovance Biotherapeutics go up and down completely randomly.
Pair Corralation between Viking Therapeutics and Iovance Biotherapeutics
Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Iovance Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Viking Therapeutics is 1.17 times less risky than Iovance Biotherapeutics. The stock trades about -0.35 of its potential returns per unit of risk. The Iovance Biotherapeutics is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,103 in Iovance Biotherapeutics on August 28, 2024 and sell it today you would lose (176.00) from holding Iovance Biotherapeutics or give up 15.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viking Therapeutics vs. Iovance Biotherapeutics
Performance |
| Timeline |
| Viking Therapeutics |
| Iovance Biotherapeutics |
Viking Therapeutics and Iovance Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Therapeutics and Iovance Biotherapeutics
The main advantage of trading using opposite Viking Therapeutics and Iovance Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics position performs unexpectedly, Iovance Biotherapeutics 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 Iovance Biotherapeutics will offset losses from the drop in Iovance Biotherapeutics' long position.| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta Therapeutics |
| Iovance Biotherapeutics vs. PTC Therapeutics | Iovance Biotherapeutics vs. Krystal Biotech | Iovance Biotherapeutics vs. Sarepta Therapeutics | Iovance Biotherapeutics vs. Madrigal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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