Correlation Between AstraZeneca PLC and Indaptus Therapeutics

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

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

Diversification Opportunities for AstraZeneca PLC and Indaptus Therapeutics

0.13

Correlation Coefficient

AstraZeneca PLC  Indaptus Therapeutics

Average diversification

The 3 months correlation between AstraZeneca and Indaptus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC ADR and Indaptus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indaptus Therapeutics and AstraZeneca PLC 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 AstraZeneca PLC ADR are associated (or correlated) with Indaptus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indaptus Therapeutics has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Indaptus Therapeutics go up and down completely randomly.

Pair Corralation between AstraZeneca PLC and Indaptus Therapeutics

Considering the 90-day investment horizon AstraZeneca PLC ADR is expected to generate 0.22 times more return on investment than Indaptus Therapeutics. However, AstraZeneca PLC ADR is 4.54 times less risky than Indaptus Therapeutics. It trades about 0.3 of its potential returns per unit of risk. Indaptus Therapeutics is currently generating about 0.06 per unit of risk. If you would invest  6,841  in AstraZeneca PLC ADR on March 10, 2024 and sell it today you would earn a total of  1,161  from holding AstraZeneca PLC ADR or generate 16.97% return on investment over 90 days.

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

AstraZeneca PLC ADR  vs.  Indaptus Therapeutics

AstraZeneca PLC ADR

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AstraZeneca PLC ADR are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AstraZeneca PLC displayed solid returns over the last few months and may actually be approaching a breakup point.

Indaptus Therapeutics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indaptus Therapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, Indaptus Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AstraZeneca PLC and Indaptus Therapeutics

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

The idea behind AstraZeneca PLC ADR and Indaptus 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.