Correlation Between Intercept Pharmaceuticals and Mirati Ther

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

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

Diversification Opportunities for Intercept Pharmaceuticals and Mirati Ther

0.66

Correlation Coefficient

Intercept Pharmaceuticals  Mirati Ther

Poor diversification

The 3 months correlation between Intercept and Mirati is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intercept Pharmaceuticals and Mirati Ther in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirati Ther and Intercept 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 Intercept Pharmaceuticals are associated (or correlated) with Mirati Ther. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirati Ther has no effect on the direction of Intercept Pharmaceuticals i.e., Intercept Pharmaceuticals and Mirati Ther go up and down completely randomly.

Pair Corralation between Intercept Pharmaceuticals and Mirati Ther

If you would invest  3,132  in Mirati Ther on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Mirati Ther or generate 0.0% return on investment over 90 days.

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

Intercept Pharmaceuticals  vs.  Mirati Ther

Intercept Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercept Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intercept Pharmaceuticals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Mirati Ther

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirati Ther has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mirati Ther is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intercept Pharmaceuticals and Mirati Ther

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

The idea behind Intercept Pharmaceuticals and Mirati Ther 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 CEOs Directory module to screen CEOs from public companies around the world.