Correlation Between Iovance Biotherapeutics and Pulmatrix

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

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

Diversification Opportunities for Iovance Biotherapeutics and Pulmatrix

-0.14

Correlation Coefficient

Iovance Biotherapeutics  Pulmatrix

Good diversification

The 3 months correlation between Iovance and Pulmatrix is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Iovance Biotherapeutics and Pulmatrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmatrix 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 Pulmatrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmatrix has no effect on the direction of Iovance Biotherapeutics i.e., Iovance Biotherapeutics and Pulmatrix go up and down completely randomly.

Pair Corralation between Iovance Biotherapeutics and Pulmatrix

Given the investment horizon of 90 days Iovance Biotherapeutics is expected to under-perform the Pulmatrix. In addition to that, Iovance Biotherapeutics is 1.57 times more volatile than Pulmatrix. It trades about -0.07 of its total potential returns per unit of risk. Pulmatrix is currently generating about -0.07 per unit of volatility. If you would invest  202.00  in Pulmatrix on February 20, 2024 and sell it today you would lose (11.00) from holding Pulmatrix or give up 5.45% of portfolio value over 90 days.

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

Iovance Biotherapeutics  vs.  Pulmatrix

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pulmatrix

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmatrix are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Pulmatrix may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Iovance Biotherapeutics and Pulmatrix

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

The idea behind Iovance Biotherapeutics and Pulmatrix 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.