Correlation Between Immutep and United Therapeutics

Can any of the company-specific risk be diversified away by investing in both Immutep and United Therapeutics 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 United Therapeutics 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 United Therapeutics, you can compare the effects of market volatilities on Immutep and United Therapeutics 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 United Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immutep and United Therapeutics.

Diversification Opportunities for Immutep and United Therapeutics

-0.42

Correlation Coefficient

Immutep  United Therapeutics

Very good diversification

The 3 months correlation between Immutep and United is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Immutep Ltd ADR and United Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Therapeutics 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 United Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Therapeutics has no effect on the direction of Immutep i.e., Immutep and United Therapeutics go up and down completely randomly.

Pair Corralation between Immutep and United Therapeutics

Given the investment horizon of 90 days Immutep Ltd ADR is expected to generate 2.02 times more return on investment than United Therapeutics. However, Immutep is 2.02 times more volatile than United Therapeutics. It trades about 0.05 of its potential returns per unit of risk. United Therapeutics is currently generating about 0.01 per unit of risk. If you would invest  203.00  in Immutep Ltd ADR on October 8, 2024 and sell it today you would earn a total of  17.00  from holding Immutep Ltd ADR or generate 8.37% return on investment over 90 days.

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

Immutep Ltd ADR  vs.  United Therapeutics

Immutep Ltd ADR

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immutep Ltd ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Immutep may actually be approaching a critical reversion point that can send shares even higher in February 2025.

United Therapeutics

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days United Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, United Therapeutics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Immutep and United Therapeutics

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

The idea behind Immutep Ltd ADR and United Therapeutics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.