Correlation Between Iteos Therapeutics and Compugen

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

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

Diversification Opportunities for Iteos Therapeutics and Compugen

0.77

Correlation Coefficient

Iteos Therapeutics  Compugen

Poor diversification

The 3 months correlation between Iteos and Compugen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Iteos Therapeutics and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen and Iteos Therapeutics 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 Iteos Therapeutics are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Iteos Therapeutics i.e., Iteos Therapeutics and Compugen go up and down completely randomly.

Pair Corralation between Iteos Therapeutics and Compugen

Given the investment horizon of 90 days Iteos Therapeutics is expected to under-perform the Compugen. In addition to that, Iteos Therapeutics is 1.35 times more volatile than Compugen. It trades about -0.24 of its total potential returns per unit of risk. Compugen is currently generating about -0.08 per unit of volatility. If you would invest  197.00  in Compugen on September 13, 2024 and sell it today you would lose (36.50) from holding Compugen or give up 18.53% of portfolio value over 90 days.

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

Iteos Therapeutics  vs.  Compugen

Iteos Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iteos Therapeutics 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Compugen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compugen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Iteos Therapeutics and Compugen

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

The idea behind Iteos Therapeutics and Compugen 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.