Correlation Between Equillium and Indaptus Therapeutics

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

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

Diversification Opportunities for Equillium and Indaptus Therapeutics

0.74

Correlation Coefficient

Equillium  Indaptus Therapeutics

Poor diversification

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

Pair Corralation between Equillium and Indaptus Therapeutics

Allowing for the 90-day total investment horizon Equillium is expected to generate 1.22 times more return on investment than Indaptus Therapeutics. However, Equillium is 1.22 times more volatile than Indaptus Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Indaptus Therapeutics is currently generating about 0.01 per unit of risk. If you would invest  106.00  in Equillium on September 23, 2024 and sell it today you would lose (45.00) from holding Equillium or give up 42.45% of portfolio value over 90 days.

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

Equillium  vs.  Indaptus Therapeutics

Equillium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equillium has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Equillium is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Indaptus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indaptus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's fundamental 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 Equillium and Indaptus Therapeutics

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

The idea behind Equillium and Indaptus Therapeutics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.