Correlation Between Immunocore Holdings and Cytokinetics

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

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

Diversification Opportunities for Immunocore Holdings and Cytokinetics

0.63

Correlation Coefficient

Immunocore Holdings  Cytokinetics

Poor diversification

The 3 months correlation between Immunocore and Cytokinetics is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Immunocore Holdings and Cytokinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytokinetics and Immunocore Holdings 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 Immunocore Holdings are associated (or correlated) with Cytokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytokinetics has no effect on the direction of Immunocore Holdings i.e., Immunocore Holdings and Cytokinetics go up and down completely randomly.

Pair Corralation between Immunocore Holdings and Cytokinetics

Given the investment horizon of 90 days Immunocore Holdings is expected to under-perform the Cytokinetics. In addition to that, Immunocore Holdings is 1.26 times more volatile than Cytokinetics. It trades about -0.14 of its total potential returns per unit of risk. Cytokinetics is currently generating about -0.17 per unit of volatility. If you would invest  5,202  in Cytokinetics on September 27, 2024 and sell it today you would lose (348.00) from holding Cytokinetics or give up 6.69% of portfolio value over 90 days.

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

Immunocore Holdings  vs.  Cytokinetics

Immunocore Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cytokinetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytokinetics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cytokinetics is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Immunocore Holdings and Cytokinetics

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

The idea behind Immunocore Holdings and Cytokinetics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.