Correlation Between ProQR Therapeutics and Incyte

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

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

Diversification Opportunities for ProQR Therapeutics and Incyte

0.53

Correlation Coefficient

ProQR Therapeutics  Incyte

Very weak diversification

The 3 months correlation between ProQR and Incyte is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ProQR Therapeutics BV and Incyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incyte and ProQR 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 ProQR Therapeutics BV are associated (or correlated) with Incyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incyte has no effect on the direction of ProQR Therapeutics i.e., ProQR Therapeutics and Incyte go up and down completely randomly.

Pair Corralation between ProQR Therapeutics and Incyte

Given the investment horizon of 90 days ProQR Therapeutics BV is expected to under-perform the Incyte. In addition to that, ProQR Therapeutics is 1.76 times more volatile than Incyte. It trades about -0.25 of its total potential returns per unit of risk. Incyte is currently generating about -0.08 per unit of volatility. If you would invest  6,842  in Incyte on December 28, 2024 and sell it today you would lose (782.00) from holding Incyte or give up 11.43% of portfolio value over 90 days.

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

ProQR Therapeutics BV  vs.  Incyte

ProQR Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProQR Therapeutics BV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Incyte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Incyte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ProQR Therapeutics and Incyte

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

The idea behind ProQR Therapeutics BV and Incyte 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.