Correlation Between Adriatic Metals and Imugene

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

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

Diversification Opportunities for Adriatic Metals and Imugene

-0.74

Correlation Coefficient

Adriatic Metals  Imugene

Pay attention - limited upside

The 3 months correlation between Adriatic and Imugene is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene and Adriatic Metals 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 Adriatic Metals Plc are associated (or correlated) with Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Imugene go up and down completely randomly.

Pair Corralation between Adriatic Metals and Imugene

Assuming the 90 days trading horizon Adriatic Metals Plc is expected to generate 0.61 times more return on investment than Imugene. However, Adriatic Metals Plc is 1.65 times less risky than Imugene. It trades about 0.03 of its potential returns per unit of risk. Imugene is currently generating about -0.04 per unit of risk. If you would invest  317.00  in Adriatic Metals Plc on September 3, 2024 and sell it today you would earn a total of  100.00  from holding Adriatic Metals Plc or generate 31.55% return on investment over 90 days.

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

Adriatic Metals Plc  vs.  Imugene

Adriatic Metals Plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adriatic Metals Plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Adriatic Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Imugene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imugene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Adriatic Metals and Imugene

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

The idea behind Adriatic Metals Plc and Imugene 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.