Correlation Between Immutep and Greenwich Lifesciences

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

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

Diversification Opportunities for Immutep and Greenwich Lifesciences

0.42

Correlation Coefficient

Immutep  Greenwich Lifesciences

Very weak diversification

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

Pair Corralation between Immutep and Greenwich Lifesciences

Given the investment horizon of 90 days Immutep Ltd ADR is expected to generate 1.17 times more return on investment than Greenwich Lifesciences. However, Immutep is 1.17 times more volatile than Greenwich Lifesciences. It trades about 0.01 of its potential returns per unit of risk. Greenwich Lifesciences is currently generating about -0.02 per unit of risk. If you would invest  223.00  in Immutep Ltd ADR on September 17, 2024 and sell it today you would lose (5.00) from holding Immutep Ltd ADR or give up 2.24% of portfolio value over 90 days.

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

Immutep Ltd ADR  vs.  Greenwich Lifesciences

Immutep Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

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

Greenwich Lifesciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenwich Lifesciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Greenwich Lifesciences is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Immutep and Greenwich Lifesciences

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

The idea behind Immutep Ltd ADR and Greenwich Lifesciences 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.