Correlation Between ADMA Biologics and Adaptimmune Therapeutics

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

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

Diversification Opportunities for ADMA Biologics and Adaptimmune Therapeutics

-0.02

Correlation Coefficient

ADMA Biologics  Adaptimmune Therapeutics

Good diversification

The 3 months correlation between ADMA and Adaptimmune is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ADMA Biologics and Adaptimmune Therapeutics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptimmune Therapeutics and ADMA Biologics 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 ADMA Biologics are associated (or correlated) with Adaptimmune Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptimmune Therapeutics has no effect on the direction of ADMA Biologics i.e., ADMA Biologics and Adaptimmune Therapeutics go up and down completely randomly.

Pair Corralation between ADMA Biologics and Adaptimmune Therapeutics

Given the investment horizon of 90 days ADMA Biologics is expected to generate 0.97 times more return on investment than Adaptimmune Therapeutics. However, ADMA Biologics is 1.03 times less risky than Adaptimmune Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Adaptimmune Therapeutics Plc is currently generating about -0.15 per unit of risk. If you would invest  1,929  in ADMA Biologics on September 24, 2024 and sell it today you would lose (157.00) from holding ADMA Biologics or give up 8.14% of portfolio value over 90 days.

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

ADMA Biologics  vs.  Adaptimmune Therapeutics Plc

ADMA Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Adaptimmune Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ADMA Biologics and Adaptimmune Therapeutics

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

The idea behind ADMA Biologics and Adaptimmune Therapeutics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.