Correlation Between INmune Bio and PolyPid

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

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

Diversification Opportunities for INmune Bio and PolyPid

-0.17

Correlation Coefficient

INmune Bio  PolyPid

Good diversification

The 3 months correlation between INmune and PolyPid is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding INmune Bio and PolyPid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PolyPid and INmune Bio 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 INmune Bio are associated (or correlated) with PolyPid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PolyPid has no effect on the direction of INmune Bio i.e., INmune Bio and PolyPid go up and down completely randomly.

Pair Corralation between INmune Bio and PolyPid

Given the investment horizon of 90 days INmune Bio is expected to under-perform the PolyPid. In addition to that, INmune Bio is 1.18 times more volatile than PolyPid. It trades about -0.05 of its total potential returns per unit of risk. PolyPid is currently generating about -0.01 per unit of volatility. If you would invest  355.00  in PolyPid on September 3, 2024 and sell it today you would lose (21.00) from holding PolyPid or give up 5.92% of portfolio value over 90 days.

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

INmune Bio  vs.  PolyPid

INmune Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INmune Bio 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 primary 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.

PolyPid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PolyPid has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PolyPid is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with INmune Bio and PolyPid

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

The idea behind INmune Bio and PolyPid 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.