Correlation Between Edgewise Therapeutics and Immutep

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

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

Diversification Opportunities for Edgewise Therapeutics and Immutep

0.36

Correlation Coefficient

Edgewise Therapeutics  Immutep

Weak diversification

The 3 months correlation between Edgewise and Immutep is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and Immutep Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immutep Ltd ADR and Edgewise 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 Edgewise Therapeutics are associated (or correlated) with Immutep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immutep Ltd ADR has no effect on the direction of Edgewise Therapeutics i.e., Edgewise Therapeutics and Immutep go up and down completely randomly.

Pair Corralation between Edgewise Therapeutics and Immutep

Given the investment horizon of 90 days Edgewise Therapeutics is expected to under-perform the Immutep. In addition to that, Edgewise Therapeutics is 1.58 times more volatile than Immutep Ltd ADR. It trades about -0.05 of its total potential returns per unit of risk. Immutep Ltd ADR is currently generating about -0.07 per unit of volatility. If you would invest  208.00  in Immutep Ltd ADR on December 30, 2024 and sell it today you would lose (22.00) from holding Immutep Ltd ADR or give up 10.58% of portfolio value over 90 days.

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

Edgewise Therapeutics  vs.  Immutep Ltd ADR

Edgewise Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edgewise Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

Immutep Ltd ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Immutep Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Edgewise Therapeutics and Immutep

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

The idea behind Edgewise Therapeutics and Immutep Ltd ADR 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.