Correlation Between Entera Bio and AC Immune

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

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

Diversification Opportunities for Entera Bio and AC Immune

0.74

Correlation Coefficient

Entera Bio  AC Immune

Poor diversification

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

Pair Corralation between Entera Bio and AC Immune

Given the investment horizon of 90 days Entera Bio is expected to generate 1.65 times more return on investment than AC Immune. However, Entera Bio is 1.65 times more volatile than AC Immune. It trades about -0.04 of its potential returns per unit of risk. AC Immune is currently generating about -0.15 per unit of risk. 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

Entera Bio  vs.  AC Immune

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.

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.

Pair Trading with Entera Bio and AC Immune

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

The idea behind Entera Bio and AC Immune 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..