Correlation Between Iovance Biotherapeutics and Haleon Plc

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

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

Diversification Opportunities for Iovance Biotherapeutics and Haleon Plc

0.25

Correlation Coefficient

Iovance Biotherapeutics  Haleon Plc

Modest diversification

The 3 months correlation between Iovance and Haleon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc 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 Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Haleon Plc go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Haleon Plc

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to under-perform the Haleon Plc. In addition to that, Iovance Biotherapeutics is 6.13 times more volatile than Haleon plc. It trades about -0.1 of its total potential returns per unit of risk. Haleon plc is currently generating about 0.3 per unit of volatility. If you would invest  943.00  in Haleon plc on September 18, 2024 and sell it today you would earn a total of  33.00  from holding Haleon plc or generate 3.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Iovance Biotherapeutics  vs.  Haleon plc

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.

Haleon plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haleon plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Iovance Biotherapeutics and Haleon Plc

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

The idea behind Iovance Biotherapeutics and Haleon plc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.