Correlation Between I Tech and Immunovia Publ

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

By analyzing existing cross correlation between I Tech and Immunovia publ AB, you can compare the effects of market volatilities on I Tech and Immunovia Publ 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 I Tech with a short position of Immunovia Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and Immunovia Publ.

Diversification Opportunities for I Tech and Immunovia Publ

0.27

Correlation Coefficient

I Tech  Immunovia Publ

Modest diversification

The 3 months correlation between ITECH and Immunovia is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding I Tech and Immunovia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunovia publ AB and I Tech 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 I Tech are associated (or correlated) with Immunovia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunovia publ AB has no effect on the direction of I Tech i.e., I Tech and Immunovia Publ go up and down completely randomly.

Pair Corralation between I Tech and Immunovia Publ

Assuming the 90 days trading horizon I Tech is expected to generate 10.98 times less return on investment than Immunovia Publ. But when comparing it to its historical volatility, I Tech is 2.92 times less risky than Immunovia Publ. It trades about 0.05 of its potential returns per unit of risk. Immunovia publ AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Immunovia publ AB on September 5, 2024 and sell it today you would earn a total of  21.00  from holding Immunovia publ AB or generate 33.33% return on investment over 90 days.

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

I Tech  vs.  Immunovia publ AB

I Tech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in I Tech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, I Tech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Immunovia publ AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immunovia publ AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Immunovia Publ sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with I Tech and Immunovia Publ

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

The idea behind I Tech and Immunovia publ AB 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.