Correlation Between Iovance Biotherapeutics and Rezolute

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

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

Diversification Opportunities for Iovance Biotherapeutics and Rezolute

0.53

Correlation Coefficient

Iovance Biotherapeutics  Rezolute

Very weak diversification

The 3 months correlation between Iovance and Rezolute is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Rezolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rezolute and Iovance Biotherapeutics 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 Iovance Biotherapeutics are associated (or correlated) with Rezolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rezolute has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Rezolute go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Rezolute

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to generate 1.44 times more return on investment than Rezolute. However, Iovance Biotherapeutics is 1.44 times more volatile than Rezolute. It trades about -0.08 of its potential returns per unit of risk. Rezolute is currently generating about -0.12 per unit of risk. If you would invest  843.00  in Iovance Biotherapeutics on September 17, 2024 and sell it today you would lose (59.00) from holding Iovance Biotherapeutics or give up 7.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Iovance Biotherapeutics  vs.  Rezolute

Iovance Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iovance Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic 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.

Rezolute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rezolute has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Rezolute is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Iovance Biotherapeutics and Rezolute

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

The idea behind Iovance Biotherapeutics and Rezolute 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .