Correlation Between Apellis Pharmaceuticals and Iteos Therapeutics

Can any of the company-specific risk be diversified away by investing in both Apellis Pharmaceuticals and Iteos 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 Apellis Pharmaceuticals and Iteos Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apellis Pharmaceuticals and Iteos Therapeutics, you can compare the effects of market volatilities on Apellis Pharmaceuticals and Iteos 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 Apellis Pharmaceuticals with a short position of Iteos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apellis Pharmaceuticals and Iteos Therapeutics.

Diversification Opportunities for Apellis Pharmaceuticals and Iteos Therapeutics

0.35

Correlation Coefficient

Apellis Pharmaceuticals  Iteos Therapeutics

Weak diversification

The 3 months correlation between Apellis and Iteos is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Apellis Pharmaceuticals and Iteos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteos Therapeutics and Apellis 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 Apellis Pharmaceuticals are associated (or correlated) with Iteos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iteos Therapeutics has no effect on the direction of Apellis Pharmaceuticals i.e., Apellis Pharmaceuticals and Iteos Therapeutics go up and down completely randomly.

Pair Corralation between Apellis Pharmaceuticals and Iteos Therapeutics

Given the investment horizon of 90 days Apellis Pharmaceuticals is expected to under-perform the Iteos Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Apellis Pharmaceuticals is 1.32 times less risky than Iteos Therapeutics. The stock trades about -0.24 of its potential returns per unit of risk. The Iteos Therapeutics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  718.00  in Iteos Therapeutics on February 10, 2025 and sell it today you would lose (51.00) from holding Iteos Therapeutics or give up 7.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Apellis Pharmaceuticals  vs.  Iteos Therapeutics

Apellis Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apellis Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Iteos Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iteos Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Iteos Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apellis Pharmaceuticals and Iteos Therapeutics

The main advantage of trading using opposite Apellis Pharmaceuticals and Iteos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apellis Pharmaceuticals position performs unexpectedly, Iteos 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 Iteos Therapeutics will offset losses from the drop in Iteos Therapeutics' long position.

The idea behind Apellis Pharmaceuticals and Iteos Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.