Correlation Between Regenxbio and Inovio Pharmaceuticals

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

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

Diversification Opportunities for Regenxbio and Inovio Pharmaceuticals

0.65

Correlation Coefficient

Regenxbio  Inovio Pharmaceuticals

Poor diversification

The 3 months correlation between Regenxbio and Inovio is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Regenxbio and Inovio Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inovio Pharmaceuticals and Regenxbio 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 Regenxbio are associated (or correlated) with Inovio Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inovio Pharmaceuticals has no effect on the direction of Regenxbio i.e., Regenxbio and Inovio Pharmaceuticals go up and down completely randomly.

Pair Corralation between Regenxbio and Inovio Pharmaceuticals

Given the investment horizon of 90 days Regenxbio is expected to generate 1.52 times more return on investment than Inovio Pharmaceuticals. However, Regenxbio is 1.52 times more volatile than Inovio Pharmaceuticals. It trades about -0.03 of its potential returns per unit of risk. Inovio Pharmaceuticals is currently generating about -0.19 per unit of risk. If you would invest  1,140  in Regenxbio on September 8, 2024 and sell it today you would lose (182.00) from holding Regenxbio or give up 15.96% of portfolio value over 90 days.

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

Regenxbio  vs.  Inovio Pharmaceuticals

Regenxbio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Inovio Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inovio Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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 Regenxbio and Inovio Pharmaceuticals

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

The idea behind Regenxbio and Inovio Pharmaceuticals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.