Correlation Between Gilead Sciences and Imunon

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

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

Diversification Opportunities for Gilead Sciences and Imunon

-0.44

Correlation Coefficient

Gilead Sciences  Imunon

Very good diversification

The 3 months correlation between Gilead and Imunon is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gilead Sciences and Imunon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imunon Inc and Gilead Sciences 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 Gilead Sciences are associated (or correlated) with Imunon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imunon Inc has no effect on the direction of Gilead Sciences i.e., Gilead Sciences and Imunon go up and down completely randomly.

Pair Corralation between Gilead Sciences and Imunon

Given the investment horizon of 90 days Gilead Sciences is expected to under-perform the Imunon. But the stock apears to be less risky and, when comparing its historical volatility, Gilead Sciences is 5.47 times less risky than Imunon. The stock trades about -0.13 of its potential returns per unit of risk. The Imunon Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Imunon Inc on October 11, 2024 and sell it today you would earn a total of  1.00  from holding Imunon Inc or generate 1.11% return on investment over 90 days.

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

Gilead Sciences  vs.  Imunon Inc

Gilead Sciences

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gilead Sciences are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, Gilead Sciences may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Imunon Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gilead Sciences and Imunon

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

The idea behind Gilead Sciences and Imunon 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.