Correlation Between Reviva Pharmaceuticals and Immatics Biotechnologies

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

By analyzing existing cross correlation between Reviva Pharmaceuticals Holdings and immatics biotechnologies GmbH, you can compare the effects of market volatilities on Reviva Pharmaceuticals and Immatics Biotechnologies 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 Reviva Pharmaceuticals with a short position of Immatics Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reviva Pharmaceuticals and Immatics Biotechnologies.

Diversification Opportunities for Reviva Pharmaceuticals and Immatics Biotechnologies

0.35

Correlation Coefficient

Reviva Pharmaceuticals  Immatics Biotechnologies

Weak diversification

The 3 months correlation between Reviva and Immatics is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Reviva Pharmaceuticals Holding and immatics biotechnologies GmbH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immatics Biotechnologies and Reviva Pharmaceuticals 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 Reviva Pharmaceuticals Holdings are associated (or correlated) with Immatics Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immatics Biotechnologies has no effect on the direction of Reviva Pharmaceuticals i.e., Reviva Pharmaceuticals and Immatics Biotechnologies go up and down completely randomly.

Pair Corralation between Reviva Pharmaceuticals and Immatics Biotechnologies

Assuming the 90 days horizon Reviva Pharmaceuticals Holdings is expected to generate 0.59 times more return on investment than Immatics Biotechnologies. However, Reviva Pharmaceuticals Holdings is 1.71 times less risky than Immatics Biotechnologies. It trades about -0.14 of its potential returns per unit of risk. immatics biotechnologies GmbH is currently generating about -0.23 per unit of risk. If you would invest  19.00  in Reviva Pharmaceuticals Holdings on December 4, 2024 and sell it today you would lose (6.75) from holding Reviva Pharmaceuticals Holdings or give up 35.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.19%
Values	Daily Returns

Reviva Pharmaceuticals Holding  vs.  immatics biotechnologies GmbH

Reviva Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Reviva Pharmaceuticals Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical indicators, Reviva Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Immatics Biotechnologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days immatics biotechnologies GmbH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Reviva Pharmaceuticals and Immatics Biotechnologies

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

The idea behind Reviva Pharmaceuticals Holdings and immatics biotechnologies GmbH 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.