Correlation Between Inventiva and Climb Bio

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

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

Diversification Opportunities for Inventiva and Climb Bio

-0.1

Correlation Coefficient

Inventiva  Climb Bio

Good diversification

The 3 months correlation between Inventiva and Climb is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Climb Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Climb Bio and Inventiva 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 Inventiva Sa are associated (or correlated) with Climb Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Climb Bio has no effect on the direction of Inventiva i.e., Inventiva and Climb Bio go up and down completely randomly.

Pair Corralation between Inventiva and Climb Bio

Considering the 90-day investment horizon Inventiva Sa is expected to under-perform the Climb Bio. But the stock apears to be less risky and, when comparing its historical volatility, Inventiva Sa is 1.09 times less risky than Climb Bio. The stock trades about -0.02 of its potential returns per unit of risk. The Climb Bio is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Climb Bio on May 4, 2025 and sell it today you would earn a total of  20.00  from holding Climb Bio or generate 16.0% return on investment over 90 days.

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

Inventiva Sa  vs.  Climb Bio

Inventiva Sa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inventiva Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Inventiva is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Climb Bio

Risk-Adjusted Performance

Modest

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

Pair Trading with Inventiva and Climb Bio

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

The idea behind Inventiva Sa and Climb Bio 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.