Correlation Between Incyte and Myriad Genetics

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

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

Diversification Opportunities for Incyte and Myriad Genetics

-0.23

Correlation Coefficient

Incyte  Myriad Genetics

Very good diversification

The 3 months correlation between Incyte and Myriad is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and Myriad Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myriad Genetics and Incyte 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 Incyte are associated (or correlated) with Myriad Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myriad Genetics has no effect on the direction of Incyte i.e., Incyte and Myriad Genetics go up and down completely randomly.

Pair Corralation between Incyte and Myriad Genetics

Given the investment horizon of 90 days Incyte is expected to generate 0.74 times more return on investment than Myriad Genetics. However, Incyte is 1.35 times less risky than Myriad Genetics. It trades about 0.07 of its potential returns per unit of risk. Myriad Genetics is currently generating about -0.08 per unit of risk. If you would invest  7,211  in Incyte on October 10, 2024 and sell it today you would earn a total of  149.00  from holding Incyte or generate 2.07% return on investment over 90 days.

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

Incyte  vs.  Myriad Genetics

Incyte

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Incyte are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Incyte showed solid returns over the last few months and may actually be approaching a breakup point.

Myriad Genetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myriad Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Incyte and Myriad Genetics

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

The idea behind Incyte and Myriad Genetics 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.