Correlation Between Hookipa Pharma and I Mab

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

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

Diversification Opportunities for Hookipa Pharma and I Mab

0.73

Correlation Coefficient

Hookipa Pharma  I Mab

Poor diversification

The 3 months correlation between Hookipa and IMAB is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hookipa Pharma and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab and Hookipa Pharma 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 Hookipa Pharma are associated (or correlated) with I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of Hookipa Pharma i.e., Hookipa Pharma and I Mab go up and down completely randomly.

Pair Corralation between Hookipa Pharma and I Mab

Given the investment horizon of 90 days Hookipa Pharma is expected to under-perform the I Mab. In addition to that, Hookipa Pharma is 1.06 times more volatile than I Mab. It trades about -0.22 of its total potential returns per unit of risk. I Mab is currently generating about -0.05 per unit of volatility. If you would invest  95.00  in I Mab on September 27, 2024 and sell it today you would lose (5.00) from holding I Mab or give up 5.26% of portfolio value over 90 days.

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

Hookipa Pharma  vs.  I Mab

Hookipa Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hookipa Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

I Mab

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I Mab has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hookipa Pharma and I Mab

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

The idea behind Hookipa Pharma and I Mab 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.