Correlation Between ImmunoGen and BioXcel Therapeutics

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

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

Diversification Opportunities for ImmunoGen and BioXcel Therapeutics

-0.42

Correlation Coefficient

ImmunoGen  BioXcel Therapeutics

Very good diversification

The 3 months correlation between ImmunoGen and BioXcel is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ImmunoGen and BioXcel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioXcel Therapeutics and ImmunoGen 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 ImmunoGen are associated (or correlated) with BioXcel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioXcel Therapeutics has no effect on the direction of ImmunoGen i.e., ImmunoGen and BioXcel Therapeutics go up and down completely randomly.

Pair Corralation between ImmunoGen and BioXcel Therapeutics

If you would invest  1,820  in ImmunoGen on September 27, 2024 and sell it today you would earn a total of  0.00  from holding ImmunoGen or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

ImmunoGen  vs.  BioXcel Therapeutics

ImmunoGen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ImmunoGen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, ImmunoGen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

BioXcel Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioXcel Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with ImmunoGen and BioXcel Therapeutics

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

The idea behind ImmunoGen and BioXcel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.