Correlation Between Immutep and Baudax BioInc

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

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

Diversification Opportunities for Immutep and Baudax BioInc

-0.62

Correlation Coefficient

Immutep  Baudax BioInc

Excellent diversification

The 3 months correlation between Immutep and Baudax is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Immutep Ltd ADR and Baudax BioInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baudax BioInc and Immutep 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 Immutep Ltd ADR are associated (or correlated) with Baudax BioInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baudax BioInc has no effect on the direction of Immutep i.e., Immutep and Baudax BioInc go up and down completely randomly.

Pair Corralation between Immutep and Baudax BioInc

Given the investment horizon of 90 days Immutep Ltd ADR is expected to generate 0.25 times more return on investment than Baudax BioInc. However, Immutep Ltd ADR is 4.07 times less risky than Baudax BioInc. It trades about 0.05 of its potential returns per unit of risk. Baudax BioInc is currently generating about 0.01 per unit of risk. If you would invest  254.00  in Immutep Ltd ADR on February 2, 2024 and sell it today you would earn a total of  6.00  from holding Immutep Ltd ADR or generate 2.36% return on investment over 90 days.

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

Immutep Ltd ADR  vs.  Baudax BioInc

Immutep Ltd ADR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Immutep Ltd ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating primary indicators, Immutep reported solid returns over the last few months and may actually be approaching a breakup point.

Baudax BioInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baudax BioInc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Immutep and Baudax BioInc

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

The idea behind Immutep Ltd ADR and Baudax BioInc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.