Correlation Between Naspers and INmune Bio

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Can any of the company-specific risk be diversified away by investing in both Naspers and INmune Bio 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 Naspers and INmune Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naspers Ltd ADR and INmune Bio, you can compare the effects of market volatilities on Naspers and INmune Bio 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 Naspers with a short position of INmune Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naspers and INmune Bio.

Diversification Opportunities for Naspers and INmune Bio

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Naspers and INmune is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Naspers Ltd ADR and INmune Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INmune Bio and Naspers 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 Naspers Ltd ADR are associated (or correlated) with INmune Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INmune Bio has no effect on the direction of Naspers i.e., Naspers and INmune Bio go up and down completely randomly.

Pair Corralation between Naspers and INmune Bio

Assuming the 90 days horizon Naspers Ltd ADR is expected to generate 1.12 times more return on investment than INmune Bio. However, Naspers is 1.12 times more volatile than INmune Bio. It trades about 0.38 of its potential returns per unit of risk. INmune Bio is currently generating about -0.05 per unit of risk. If you would invest  2,237  in Naspers Ltd ADR on September 3, 2022 and sell it today you would earn a total of  830.00  from holding Naspers Ltd ADR or generate 37.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Naspers Ltd ADR  vs.  INmune Bio

 Performance (%) 
       Timeline  
Naspers Ltd ADR 
Naspers Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Naspers Ltd ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Naspers showed solid returns over the last few months and may actually be approaching a breakup point.

Naspers Price Channel

INmune Bio 
INmune Performance
0 of 100
Over the last 90 days INmune Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, INmune Bio is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

INmune Price Channel

Naspers and INmune Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Naspers and INmune Bio

The main advantage of trading using opposite Naspers and INmune Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naspers position performs unexpectedly, INmune Bio 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 INmune Bio will offset losses from the drop in INmune Bio's long position.
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The idea behind Naspers Ltd ADR and INmune Bio 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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Check out your portfolio center. 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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