Correlation Between Adimmune Corp and Universal

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

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

Diversification Opportunities for Adimmune Corp and Universal

0.78

Correlation Coefficient

Adimmune Corp  Universal

Poor diversification

The 3 months correlation between Adimmune and Universal is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Adimmune Corp and Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal and Adimmune Corp 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 Adimmune Corp are associated (or correlated) with Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal has no effect on the direction of Adimmune Corp i.e., Adimmune Corp and Universal go up and down completely randomly.

Pair Corralation between Adimmune Corp and Universal

Assuming the 90 days trading horizon Adimmune Corp is expected to generate 2.16 times less return on investment than Universal. But when comparing it to its historical volatility, Adimmune Corp is 1.29 times less risky than Universal. It trades about 0.05 of its potential returns per unit of risk. Universal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,720  in Universal on December 5, 2024 and sell it today you would earn a total of  390.00  from holding Universal or generate 14.34% return on investment over 90 days.

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

Adimmune Corp  vs.  Universal

Adimmune Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adimmune Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Adimmune Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Universal

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Universal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Universal showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adimmune Corp and Universal

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

The idea behind Adimmune Corp and Universal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.