Correlation Between Intercept Pharmaceuticals and PDS Biotechnology

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

By analyzing existing cross correlation between Intercept Pharmaceuticals and PDS Biotechnology Corp, you can compare the effects of market volatilities on Intercept Pharmaceuticals and PDS Biotechnology 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 PDS Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercept Pharmaceuticals and PDS Biotechnology.

Diversification Opportunities for Intercept Pharmaceuticals and PDS Biotechnology

0.11

Correlation Coefficient

Intercept Pharmaceuticals  PDS Biotechnology

Average diversification

The 3 months correlation between Intercept and PDS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Intercept Pharmaceuticals and PDS Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDS Biotechnology Corp 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 PDS Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDS Biotechnology Corp has no effect on the direction of Intercept Pharmaceuticals i.e., Intercept Pharmaceuticals and PDS Biotechnology go up and down completely randomly.

Pair Corralation between Intercept Pharmaceuticals and PDS Biotechnology

If you would invest  1,031  in Intercept Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Intercept Pharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Intercept Pharmaceuticals  vs.  PDS Biotechnology Corp

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.

PDS Biotechnology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PDS Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Intercept Pharmaceuticals and PDS Biotechnology

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

The idea behind Intercept Pharmaceuticals and PDS Biotechnology Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.