Correlation Between Adaptimmune Therapeutics and OptiNose

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

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

Diversification Opportunities for Adaptimmune Therapeutics and OptiNose

0.87

Correlation Coefficient

Adaptimmune Therapeutics  OptiNose

Very poor diversification

The 3 months correlation between Adaptimmune and OptiNose is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Adaptimmune Therapeutics Plc and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and Adaptimmune Therapeutics 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 Adaptimmune Therapeutics Plc are associated (or correlated) with OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of Adaptimmune Therapeutics i.e., Adaptimmune Therapeutics and OptiNose go up and down completely randomly.

Pair Corralation between Adaptimmune Therapeutics and OptiNose

Given the investment horizon of 90 days Adaptimmune Therapeutics Plc is expected to generate 0.71 times more return on investment than OptiNose. However, Adaptimmune Therapeutics Plc is 1.4 times less risky than OptiNose. It trades about 0.06 of its potential returns per unit of risk. OptiNose is currently generating about -0.1 per unit of risk. If you would invest  70.00  in Adaptimmune Therapeutics Plc on August 30, 2024 and sell it today you would earn a total of  3.00  from holding Adaptimmune Therapeutics Plc or generate 4.29% return on investment over 90 days.

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

Adaptimmune Therapeutics Plc  vs.  OptiNose

Adaptimmune Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adaptimmune Therapeutics Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

OptiNose

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OptiNose has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Adaptimmune Therapeutics and OptiNose

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

The idea behind Adaptimmune Therapeutics Plc and OptiNose 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.