Correlation Between Weiss Korea and ImmuPharma PLC

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

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

Diversification Opportunities for Weiss Korea and ImmuPharma PLC

0.38

Correlation Coefficient

Weiss Korea  ImmuPharma PLC

Weak diversification

The 3 months correlation between Weiss and ImmuPharma is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity and ImmuPharma PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuPharma PLC and Weiss Korea 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 Weiss Korea Opportunity are associated (or correlated) with ImmuPharma PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuPharma PLC has no effect on the direction of Weiss Korea i.e., Weiss Korea and ImmuPharma PLC go up and down completely randomly.

Pair Corralation between Weiss Korea and ImmuPharma PLC

Assuming the 90 days trading horizon Weiss Korea is expected to generate 76.54 times less return on investment than ImmuPharma PLC. But when comparing it to its historical volatility, Weiss Korea Opportunity is 18.24 times less risky than ImmuPharma PLC. It trades about 0.03 of its potential returns per unit of risk. ImmuPharma PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  123.00  in ImmuPharma PLC on December 25, 2024 and sell it today you would earn a total of  221.00  from holding ImmuPharma PLC or generate 179.67% return on investment over 90 days.

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

Weiss Korea Opportunity  vs.  ImmuPharma PLC

Weiss Korea Opportunity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Weiss Korea Opportunity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Weiss Korea is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ImmuPharma PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuPharma PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, ImmuPharma PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weiss Korea and ImmuPharma PLC

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

The idea behind Weiss Korea Opportunity and ImmuPharma PLC 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.