Correlation Between Pharnext and Innate Pharma

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

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

Diversification Opportunities for Pharnext and Innate Pharma

0.0

Correlation Coefficient

Pharnext  Innate Pharma

Pay attention - limited upside

The 3 months correlation between Pharnext and Innate is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pharnext SA and Innate Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innate Pharma and Pharnext 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 Pharnext SA are associated (or correlated) with Innate Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innate Pharma has no effect on the direction of Pharnext i.e., Pharnext and Innate Pharma go up and down completely randomly.

Pair Corralation between Pharnext and Innate Pharma

If you would invest  163.00  in Innate Pharma on October 24, 2024 and sell it today you would earn a total of  12.00  from holding Innate Pharma or generate 7.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pharnext SA  vs.  Innate Pharma

Pharnext SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pharnext SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Pharnext is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Innate Pharma

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Innate Pharma are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, Innate Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pharnext and Innate Pharma

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

The idea behind Pharnext SA and Innate Pharma 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.

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.