Correlation Between Iovance Biotherapeutics and Vaxcyte

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

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

Diversification Opportunities for Iovance Biotherapeutics and Vaxcyte

0.6

Correlation Coefficient

Iovance Biotherapeutics  Vaxcyte

Poor diversification

The 3 months correlation between Iovance and Vaxcyte is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Vaxcyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxcyte 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 Vaxcyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxcyte has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Vaxcyte go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Vaxcyte

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to generate 1.84 times more return on investment than Vaxcyte. However, Iovance Biotherapeutics is 1.84 times more volatile than Vaxcyte. It trades about -0.06 of its potential returns per unit of risk. Vaxcyte is currently generating about -0.17 per unit of risk. If you would invest  981.00  in Iovance Biotherapeutics on September 15, 2024 and sell it today you would lose (198.00) from holding Iovance Biotherapeutics or give up 20.18% of portfolio value over 90 days.

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

Iovance Biotherapeutics  vs.  Vaxcyte

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.

Vaxcyte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaxcyte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly 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.

Pair Trading with Iovance Biotherapeutics and Vaxcyte

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

The idea behind Iovance Biotherapeutics and Vaxcyte 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..