Correlation Between Iovance Biotherapeutics and HCW Biologics
Can any of the company-specific risk be diversified away by investing in both Iovance Biotherapeutics and HCW Biologics 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 Iovance Biotherapeutics and HCW Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iovance Biotherapeutics and HCW Biologics, you can compare the effects of market volatilities on Iovance Biotherapeutics and HCW Biologics 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 Iovance Biotherapeutics with a short position of HCW Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iovance Biotherapeutics and HCW Biologics.
Diversification Opportunities for Iovance Biotherapeutics and HCW Biologics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iovance and HCW is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and HCW Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCW Biologics and Iovance Biotherapeutics 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 Iovance Biotherapeutics are associated (or correlated) with HCW Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCW Biologics has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and HCW Biologics go up and down completely randomly.
Pair Corralation between Iovance Biotherapeutics and HCW Biologics
Given the investment horizon of 90 days Iovance Biotherapeutics is expected to under-perform the HCW Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Iovance Biotherapeutics is 3.04 times less risky than HCW Biologics. The stock trades about -0.17 of its potential returns per unit of risk. The HCW Biologics is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 47.00 in HCW Biologics on June 24, 2024 and sell it today you would earn a total of 14.00 from holding HCW Biologics or generate 29.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Iovance Biotherapeutics vs. HCW Biologics
Performance |
Timeline |
Iovance Biotherapeutics |
HCW Biologics |
Iovance Biotherapeutics and HCW Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iovance Biotherapeutics and HCW Biologics
The main advantage of trading using opposite Iovance Biotherapeutics and HCW Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iovance Biotherapeutics position performs unexpectedly, HCW Biologics 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 HCW Biologics will offset losses from the drop in HCW Biologics' long position.Iovance Biotherapeutics vs. HCW Biologics | Iovance Biotherapeutics vs. RenovoRx | Iovance Biotherapeutics vs. Scpharmaceuticals | Iovance Biotherapeutics vs. Milestone Pharmaceuticals |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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