Correlation Between AC Immune and Entera Bio

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

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

Diversification Opportunities for AC Immune and Entera Bio

0.74

Correlation Coefficient

AC Immune  Entera Bio

Poor diversification

The 3 months correlation between ACIU and Entera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AC Immune and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio and AC Immune 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 AC Immune are associated (or correlated) with Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of AC Immune i.e., AC Immune and Entera Bio go up and down completely randomly.

Pair Corralation between AC Immune and Entera Bio

Given the investment horizon of 90 days AC Immune is expected to under-perform the Entera Bio. But the stock apears to be less risky and, when comparing its historical volatility, AC Immune is 1.65 times less risky than Entera Bio. The stock trades about -0.15 of its potential returns per unit of risk. The Entera Bio is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  218.00  in Entera Bio on December 28, 2024 and sell it today you would lose (36.00) from holding Entera Bio or give up 16.51% of portfolio value over 90 days.

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

AC Immune  vs.  Entera Bio

AC Immune

Risk-Adjusted Performance

Very Weak

Over the last 90 days AC Immune has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Entera Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entera Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with AC Immune and Entera Bio

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

The idea behind AC Immune and Entera Bio 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .