Correlation Between Apellis Pharmaceuticals and Incyte

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

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

Diversification Opportunities for Apellis Pharmaceuticals and Incyte

0.51

Correlation Coefficient

Apellis Pharmaceuticals  Incyte

Very weak diversification

The 3 months correlation between Apellis and Incyte is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Apellis Pharmaceuticals and Incyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incyte and Apellis Pharmaceuticals 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 Apellis Pharmaceuticals are associated (or correlated) with Incyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incyte has no effect on the direction of Apellis Pharmaceuticals i.e., Apellis Pharmaceuticals and Incyte go up and down completely randomly.

Pair Corralation between Apellis Pharmaceuticals and Incyte

Given the investment horizon of 90 days Apellis Pharmaceuticals is expected to under-perform the Incyte. In addition to that, Apellis Pharmaceuticals is 1.47 times more volatile than Incyte. It trades about -0.12 of its total potential returns per unit of risk. Incyte is currently generating about -0.08 per unit of volatility. If you would invest  6,842  in Incyte on December 29, 2024 and sell it today you would lose (782.00) from holding Incyte or give up 11.43% of portfolio value over 90 days.

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

Apellis Pharmaceuticals  vs.  Incyte

Apellis Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apellis Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential 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.

Incyte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Incyte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental 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 Apellis Pharmaceuticals and Incyte

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

The idea behind Apellis Pharmaceuticals and Incyte 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.