Correlation Between Inventiva and Pulmatrix

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

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

Diversification Opportunities for Inventiva and Pulmatrix

0.27

Correlation Coefficient

Inventiva  Pulmatrix

Modest diversification

The 3 months correlation between Inventiva and Pulmatrix is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Pulmatrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmatrix 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 Pulmatrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmatrix has no effect on the direction of Inventiva i.e., Inventiva and Pulmatrix go up and down completely randomly.

Pair Corralation between Inventiva and Pulmatrix

Considering the 90-day investment horizon Inventiva Sa is expected to generate 0.81 times more return on investment than Pulmatrix. However, Inventiva Sa is 1.24 times less risky than Pulmatrix. It trades about -0.02 of its potential returns per unit of risk. Pulmatrix is currently generating about -0.03 per unit of risk. If you would invest  353.00  in Inventiva Sa on May 5, 2025 and sell it today you would lose (31.00) from holding Inventiva Sa or give up 8.78% of portfolio value over 90 days.

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

Inventiva Sa  vs.  Pulmatrix

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.

Pulmatrix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pulmatrix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Inventiva and Pulmatrix

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

The idea behind Inventiva Sa and Pulmatrix 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.