Correlation Between PDS Biotechnology and Adaptimmune Therapeutics

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

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

Diversification Opportunities for PDS Biotechnology and Adaptimmune Therapeutics

0.26

Correlation Coefficient

PDS Biotechnology  Adaptimmune Therapeutics

Modest diversification

The 3 months correlation between PDS and Adaptimmune is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding PDS Biotechnology Corp and Adaptimmune Therapeutics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptimmune Therapeutics and PDS Biotechnology 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 PDS Biotechnology Corp are associated (or correlated) with Adaptimmune Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptimmune Therapeutics has no effect on the direction of PDS Biotechnology i.e., PDS Biotechnology and Adaptimmune Therapeutics go up and down completely randomly.

Pair Corralation between PDS Biotechnology and Adaptimmune Therapeutics

Given the investment horizon of 90 days PDS Biotechnology Corp is expected to generate 0.64 times more return on investment than Adaptimmune Therapeutics. However, PDS Biotechnology Corp is 1.56 times less risky than Adaptimmune Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Adaptimmune Therapeutics Plc is currently generating about -0.08 per unit of risk. If you would invest  133.00  in PDS Biotechnology Corp on February 28, 2025 and sell it today you would earn a total of  7.00  from holding PDS Biotechnology Corp or generate 5.26% return on investment over 90 days.

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

PDS Biotechnology Corp  vs.  Adaptimmune Therapeutics Plc

PDS Biotechnology Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PDS Biotechnology Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PDS Biotechnology sustained solid returns over the last few months and may actually be approaching a breakup point.

Adaptimmune Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adaptimmune Therapeutics Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with PDS Biotechnology and Adaptimmune Therapeutics

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

The idea behind PDS Biotechnology Corp and Adaptimmune Therapeutics Plc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.