Correlation Between Iovance Biotherapeutics and Atara Biotherapeutics

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

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

Diversification Opportunities for Iovance Biotherapeutics and Atara Biotherapeutics

-0.36

Correlation Coefficient

Iovance Biotherapeutics  Atara Biotherapeutics

Very good diversification

The 3 months correlation between Iovance and Atara is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Atara Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atara Biotherapeutics and Iovance Biotherapeutics 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 Iovance Biotherapeutics are associated (or correlated) with Atara Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atara Biotherapeutics has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Atara Biotherapeutics go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Atara Biotherapeutics

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to generate 0.67 times more return on investment than Atara Biotherapeutics. However, Iovance Biotherapeutics is 1.5 times less risky than Atara Biotherapeutics. It trades about 0.04 of its potential returns per unit of risk. Atara Biotherapeutics is currently generating about 0.0 per unit of risk. If you would invest  568.00  in Iovance Biotherapeutics on September 18, 2024 and sell it today you would earn a total of  216.00  from holding Iovance Biotherapeutics or generate 38.03% return on investment over 90 days.

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

Iovance Biotherapeutics  vs.  Atara Biotherapeutics

Iovance Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iovance Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Atara Biotherapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atara Biotherapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Atara Biotherapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iovance Biotherapeutics and Atara Biotherapeutics

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

The idea behind Iovance Biotherapeutics and Atara Biotherapeutics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.