Correlation Between Iovance Biotherapeutics and Benitec Biopharma

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

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

Diversification Opportunities for Iovance Biotherapeutics and Benitec Biopharma

0.08

Correlation Coefficient

Iovance Biotherapeutics  Benitec Biopharma

Significant diversification

The 3 months correlation between Iovance and Benitec is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Benitec Biopharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benitec Biopharma 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 Benitec Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benitec Biopharma has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Benitec Biopharma go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Benitec Biopharma

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to generate 2.77 times less return on investment than Benitec Biopharma. But when comparing it to its historical volatility, Iovance Biotherapeutics is 1.39 times less risky than Benitec Biopharma. It trades about 0.04 of its potential returns per unit of risk. Benitec Biopharma Ltd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  294.00  in Benitec Biopharma Ltd on September 13, 2024 and sell it today you would earn a total of  941.00  from holding Benitec Biopharma Ltd or generate 320.07% return on investment over 90 days.

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

Iovance Biotherapeutics  vs.  Benitec Biopharma Ltd

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 uncertain 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.

Benitec Biopharma

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Benitec Biopharma Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Benitec Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iovance Biotherapeutics and Benitec Biopharma

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

The idea behind Iovance Biotherapeutics and Benitec Biopharma Ltd 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.