Correlation Between TaiMed Biologics and Adimmune Corp

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

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

Diversification Opportunities for TaiMed Biologics and Adimmune Corp

0.43

Correlation Coefficient

TaiMed Biologics  Adimmune Corp

Very weak diversification

The 3 months correlation between TaiMed and Adimmune is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding TaiMed Biologics and Adimmune Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adimmune Corp and TaiMed Biologics 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 TaiMed Biologics 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 TaiMed Biologics i.e., TaiMed Biologics and Adimmune Corp go up and down completely randomly.

Pair Corralation between TaiMed Biologics and Adimmune Corp

Assuming the 90 days trading horizon TaiMed Biologics is expected to generate 0.86 times more return on investment than Adimmune Corp. However, TaiMed Biologics is 1.16 times less risky than Adimmune Corp. It trades about 0.1 of its potential returns per unit of risk. Adimmune Corp is currently generating about 0.02 per unit of risk. If you would invest  8,630  in TaiMed Biologics on December 26, 2024 and sell it today you would earn a total of  1,230  from holding TaiMed Biologics or generate 14.25% return on investment over 90 days.

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

TaiMed Biologics  vs.  Adimmune Corp

TaiMed Biologics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TaiMed Biologics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TaiMed Biologics showed solid returns over the last few months and may actually be approaching a breakup point.

Adimmune Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Adimmune Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Adimmune Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with TaiMed Biologics and Adimmune Corp

The main advantage of trading using opposite TaiMed Biologics and Adimmune Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TaiMed Biologics 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 TaiMed Biologics 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 Stocks Directory module to find actively traded stocks across global markets.