Correlation Between Checkpoint Therapeutics and Ibio

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

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

Diversification Opportunities for Checkpoint Therapeutics and Ibio

0.14

Correlation Coefficient

Checkpoint Therapeutics  Ibio

Average diversification

The 3 months correlation between Checkpoint and Ibio is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Checkpoint Therapeutics and Ibio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibio Inc and Checkpoint 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 Checkpoint Therapeutics are associated (or correlated) with Ibio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibio Inc has no effect on the direction of Checkpoint Therapeutics i.e., Checkpoint Therapeutics and Ibio go up and down completely randomly.

Pair Corralation between Checkpoint Therapeutics and Ibio

Given the investment horizon of 90 days Checkpoint Therapeutics is expected to generate 4.05 times less return on investment than Ibio. But when comparing it to its historical volatility, Checkpoint Therapeutics is 2.18 times less risky than Ibio. It trades about 0.01 of its potential returns per unit of risk. Ibio Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,462  in Ibio Inc on October 7, 2024 and sell it today you would lose (1,217) from holding Ibio Inc or give up 83.24% of portfolio value over 90 days.

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

Checkpoint Therapeutics  vs.  Ibio Inc

Checkpoint Therapeutics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Checkpoint Therapeutics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Checkpoint Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ibio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ibio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Ibio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Checkpoint Therapeutics and Ibio

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

The idea behind Checkpoint Therapeutics and Ibio Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.