Correlation Between Immutep and Sino Biopharmaceutica

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

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

Diversification Opportunities for Immutep and Sino Biopharmaceutica

-0.71

Correlation Coefficient

Immutep  Sino Biopharmaceutica

Pay attention - limited upside

The 3 months correlation between Immutep and Sino is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Immutep Ltd ADR and Sino Biopharmaceutical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Biopharmaceutical and Immutep 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 Immutep Ltd ADR are associated (or correlated) with Sino Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Biopharmaceutical has no effect on the direction of Immutep i.e., Immutep and Sino Biopharmaceutica go up and down completely randomly.

Pair Corralation between Immutep and Sino Biopharmaceutica

Given the investment horizon of 90 days Immutep Ltd ADR is expected to generate 1.77 times more return on investment than Sino Biopharmaceutica. However, Immutep is 1.77 times more volatile than Sino Biopharmaceutical Limited. It trades about 0.14 of its potential returns per unit of risk. Sino Biopharmaceutical Limited is currently generating about -0.21 per unit of risk. If you would invest  182.00  in Immutep Ltd ADR on September 2, 2024 and sell it today you would earn a total of  21.00  from holding Immutep Ltd ADR or generate 11.54% return on investment over 90 days.

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

Immutep Ltd ADR  vs.  Sino Biopharmaceutical Limited

Immutep Ltd ADR

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sino Biopharmaceutical

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sino Biopharmaceutical Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Sino Biopharmaceutica may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Immutep and Sino Biopharmaceutica

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

The idea behind Immutep Ltd ADR and Sino Biopharmaceutical Limited 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.