Correlation Between Biohaven Pharmaceutical and Immunitybio

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

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

Diversification Opportunities for Biohaven Pharmaceutical and Immunitybio

-0.47

Correlation Coefficient

Biohaven Pharmaceutical  Immunitybio

Very good diversification

The 3 months correlation between Biohaven and Immunitybio is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Biohaven Pharmaceutical Holdin and Immunitybio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunitybio and Biohaven Pharmaceutical 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 Biohaven Pharmaceutical Holding are associated (or correlated) with Immunitybio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunitybio has no effect on the direction of Biohaven Pharmaceutical i.e., Biohaven Pharmaceutical and Immunitybio go up and down completely randomly.

Pair Corralation between Biohaven Pharmaceutical and Immunitybio

Given the investment horizon of 90 days Biohaven Pharmaceutical Holding is expected to under-perform the Immunitybio. In addition to that, Biohaven Pharmaceutical is 1.15 times more volatile than Immunitybio. It trades about -0.1 of its total potential returns per unit of risk. Immunitybio is currently generating about 0.06 per unit of volatility. If you would invest  210.00  in Immunitybio on May 4, 2025 and sell it today you would earn a total of  27.00  from holding Immunitybio or generate 12.86% return on investment over 90 days.

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

Biohaven Pharmaceutical Holdin  vs.  Immunitybio

Biohaven Pharmaceutical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biohaven Pharmaceutical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Immunitybio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Immunitybio are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Immunitybio showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biohaven Pharmaceutical and Immunitybio

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

The idea behind Biohaven Pharmaceutical Holding and Immunitybio 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.