Correlation Between Indaptus Therapeutics and ABVC Biopharma

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

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

Diversification Opportunities for Indaptus Therapeutics and ABVC Biopharma

0.47

Correlation Coefficient

Indaptus Therapeutics  ABVC Biopharma

Very weak diversification

The 3 months correlation between Indaptus and ABVC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Indaptus Therapeutics and ABVC Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABVC Biopharma and Indaptus Therapeutics 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 Indaptus Therapeutics are associated (or correlated) with ABVC Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABVC Biopharma has no effect on the direction of Indaptus Therapeutics i.e., Indaptus Therapeutics and ABVC Biopharma go up and down completely randomly.

Pair Corralation between Indaptus Therapeutics and ABVC Biopharma

Given the investment horizon of 90 days Indaptus Therapeutics is expected to under-perform the ABVC Biopharma. In addition to that, Indaptus Therapeutics is 1.27 times more volatile than ABVC Biopharma. It trades about -0.06 of its total potential returns per unit of risk. ABVC Biopharma is currently generating about -0.03 per unit of volatility. If you would invest  66.00  in ABVC Biopharma on September 1, 2024 and sell it today you would lose (13.00) from holding ABVC Biopharma or give up 19.7% of portfolio value over 90 days.

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

Indaptus Therapeutics  vs.  ABVC Biopharma

Indaptus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indaptus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ABVC Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABVC Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Indaptus Therapeutics and ABVC Biopharma

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

The idea behind Indaptus Therapeutics and ABVC Biopharma 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.