Correlation Between RenovoRx and Iovance Biotherapeutics

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

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

Diversification Opportunities for RenovoRx and Iovance Biotherapeutics

-0.63

Correlation Coefficient

RenovoRx  Iovance Biotherapeutics

Excellent diversification

The 3 months correlation between RenovoRx and Iovance is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding RenovoRx and Iovance Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iovance Biotherapeutics and RenovoRx 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 RenovoRx are associated (or correlated) with Iovance Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iovance Biotherapeutics has no effect on the direction of RenovoRx i.e., RenovoRx and Iovance Biotherapeutics go up and down completely randomly.

Pair Corralation between RenovoRx and Iovance Biotherapeutics

Given the investment horizon of 90 days RenovoRx is expected to generate 1.36 times more return on investment than Iovance Biotherapeutics. However, RenovoRx is 1.36 times more volatile than Iovance Biotherapeutics. It trades about 0.02 of its potential returns per unit of risk. Iovance Biotherapeutics is currently generating about 0.03 per unit of risk. If you would invest  196.00  in RenovoRx on June 24, 2024 and sell it today you would lose (74.00) from holding RenovoRx or give up 37.76% of portfolio value over 90 days.

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

RenovoRx  vs.  Iovance Biotherapeutics

RenovoRx

Risk-Adjusted Performance

3 of 100

Insignificant

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

Iovance Biotherapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Iovance Biotherapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Iovance Biotherapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RenovoRx and Iovance Biotherapeutics

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

The idea behind RenovoRx and Iovance Biotherapeutics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..