Correlation Between Immatics Biotechnologies and DiaMedica Therapeutics

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

By analyzing existing cross correlation between immatics biotechnologies GmbH and DiaMedica Therapeutics, you can compare the effects of market volatilities on Immatics Biotechnologies and DiaMedica 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 Immatics Biotechnologies with a short position of DiaMedica Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immatics Biotechnologies and DiaMedica Therapeutics.

Diversification Opportunities for Immatics Biotechnologies and DiaMedica Therapeutics

-0.12

Correlation Coefficient

Immatics Biotechnologies  DiaMedica Therapeutics

Good diversification

The 3 months correlation between Immatics and DiaMedica is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding immatics biotechnologies GmbH and DiaMedica Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiaMedica Therapeutics and Immatics Biotechnologies 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 immatics biotechnologies GmbH are associated (or correlated) with DiaMedica Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiaMedica Therapeutics has no effect on the direction of Immatics Biotechnologies i.e., Immatics Biotechnologies and DiaMedica Therapeutics go up and down completely randomly.

Pair Corralation between Immatics Biotechnologies and DiaMedica Therapeutics

Assuming the 90 days horizon immatics biotechnologies GmbH is expected to under-perform the DiaMedica Therapeutics. In addition to that, Immatics Biotechnologies is 7.52 times more volatile than DiaMedica Therapeutics. It trades about -0.03 of its total potential returns per unit of risk. DiaMedica Therapeutics is currently generating about -0.12 per unit of volatility. If you would invest  534.00  in DiaMedica Therapeutics on December 30, 2024 and sell it today you would lose (152.00) from holding DiaMedica Therapeutics or give up 28.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.26%
Values	Daily Returns

immatics biotechnologies GmbH  vs.  DiaMedica Therapeutics

Immatics Biotechnologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days immatics biotechnologies GmbH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

DiaMedica Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days DiaMedica Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Immatics Biotechnologies and DiaMedica Therapeutics

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

The idea behind immatics biotechnologies GmbH and DiaMedica 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.