Correlation Between Incyte and Serina Therapeutics

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

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

Diversification Opportunities for Incyte and Serina Therapeutics

-0.57

Correlation Coefficient

Incyte  Serina Therapeutics

Excellent diversification

The 3 months correlation between Incyte and Serina is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Incyte and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Incyte i.e., Incyte and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Incyte and Serina Therapeutics

Given the investment horizon of 90 days Incyte is expected to generate 0.33 times more return on investment than Serina Therapeutics. However, Incyte is 3.07 times less risky than Serina Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Serina Therapeutics is currently generating about -0.03 per unit of risk. If you would invest  6,576  in Incyte on October 9, 2024 and sell it today you would earn a total of  615.00  from holding Incyte or generate 9.35% return on investment over 90 days.

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

Incyte  vs.  Serina Therapeutics

Incyte

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Incyte are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Incyte may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Incyte and Serina Therapeutics

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

The idea behind Incyte and Serina 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.