Correlation Between ScinoPharm Taiwan and Adimmune Corp

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

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

Diversification Opportunities for ScinoPharm Taiwan and Adimmune Corp

0.93

Correlation Coefficient

ScinoPharm Taiwan  Adimmune Corp

Almost no diversification

The 3 months correlation between ScinoPharm and Adimmune is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ScinoPharm Taiwan and Adimmune Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adimmune Corp and ScinoPharm Taiwan 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 ScinoPharm Taiwan are associated (or correlated) with Adimmune Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adimmune Corp has no effect on the direction of ScinoPharm Taiwan i.e., ScinoPharm Taiwan and Adimmune Corp go up and down completely randomly.

Pair Corralation between ScinoPharm Taiwan and Adimmune Corp

Assuming the 90 days trading horizon ScinoPharm Taiwan is expected to generate 0.74 times more return on investment than Adimmune Corp. However, ScinoPharm Taiwan is 1.35 times less risky than Adimmune Corp. It trades about -0.2 of its potential returns per unit of risk. Adimmune Corp is currently generating about -0.4 per unit of risk. If you would invest  2,485  in ScinoPharm Taiwan on September 15, 2024 and sell it today you would lose (265.00) from holding ScinoPharm Taiwan or give up 10.66% of portfolio value over 90 days.

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

ScinoPharm Taiwan  vs.  Adimmune Corp

ScinoPharm Taiwan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ScinoPharm Taiwan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Adimmune Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adimmune Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with ScinoPharm Taiwan and Adimmune Corp

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

The idea behind ScinoPharm Taiwan and Adimmune Corp 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.