Correlation Between Orapi SA and Innate Pharma

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

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

Diversification Opportunities for Orapi SA and Innate Pharma

-0.26

Correlation Coefficient

Orapi SA  Innate Pharma

Very good diversification

The 3 months correlation between Orapi and Innate is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Orapi SA and Innate Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innate Pharma and Orapi SA 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 Orapi SA are associated (or correlated) with Innate Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innate Pharma has no effect on the direction of Orapi SA i.e., Orapi SA and Innate Pharma go up and down completely randomly.

Pair Corralation between Orapi SA and Innate Pharma

If you would invest  143.00  in Innate Pharma on October 5, 2024 and sell it today you would earn a total of  48.00  from holding Innate Pharma or generate 33.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

Orapi SA  vs.  Innate Pharma

Orapi SA

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Orapi SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Orapi SA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Innate Pharma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Innate Pharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Innate Pharma is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Orapi SA and Innate Pharma

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

The idea behind Orapi SA and Innate Pharma 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.