Correlation Between Inozyme Pharma and Protalix Biotherapeutics

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

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

Diversification Opportunities for Inozyme Pharma and Protalix Biotherapeutics

-0.93

Correlation Coefficient

Inozyme Pharma  Protalix Biotherapeutics

Pay attention - limited upside

The 3 months correlation between Inozyme and Protalix is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Inozyme Pharma and Protalix Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protalix Biotherapeutics and Inozyme Pharma 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 Inozyme Pharma are associated (or correlated) with Protalix Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protalix Biotherapeutics has no effect on the direction of Inozyme Pharma i.e., Inozyme Pharma and Protalix Biotherapeutics go up and down completely randomly.

Pair Corralation between Inozyme Pharma and Protalix Biotherapeutics

Given the investment horizon of 90 days Inozyme Pharma is expected to under-perform the Protalix Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Inozyme Pharma is 1.11 times less risky than Protalix Biotherapeutics. The stock trades about -0.23 of its potential returns per unit of risk. The Protalix Biotherapeutics is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  106.00  in Protalix Biotherapeutics on September 12, 2024 and sell it today you would earn a total of  74.00  from holding Protalix Biotherapeutics or generate 69.81% return on investment over 90 days.

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

Inozyme Pharma  vs.  Protalix Biotherapeutics

Inozyme Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inozyme Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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 current disturbance may also be a sign of long term up-swing for the company investors.

Protalix Biotherapeutics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Protalix Biotherapeutics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Protalix Biotherapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inozyme Pharma and Protalix Biotherapeutics

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

The idea behind Inozyme Pharma and Protalix Biotherapeutics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.