Correlation Between VBI Vaccines and Portage Biotech

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

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

Diversification Opportunities for VBI Vaccines and Portage Biotech

-0.09

Correlation Coefficient

VBI Vaccines  Portage Biotech

Good diversification

The 3 months correlation between VBI and Portage is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding VBI Vaccines and Portage Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portage Biotech and VBI Vaccines 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 VBI Vaccines are associated (or correlated) with Portage Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portage Biotech has no effect on the direction of VBI Vaccines i.e., VBI Vaccines and Portage Biotech go up and down completely randomly.

Pair Corralation between VBI Vaccines and Portage Biotech

Given the investment horizon of 90 days VBI Vaccines is expected to generate 0.25 times more return on investment than Portage Biotech. However, VBI Vaccines is 4.0 times less risky than Portage Biotech. It trades about 0.42 of its potential returns per unit of risk. Portage Biotech is currently generating about 0.03 per unit of risk. If you would invest  56.00  in VBI Vaccines on February 27, 2024 and sell it today you would earn a total of  9.00  from holding VBI Vaccines or generate 16.07% return on investment over 90 days.

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

VBI Vaccines  vs.  Portage Biotech

VBI Vaccines

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VBI Vaccines are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, VBI Vaccines showed solid returns over the last few months and may actually be approaching a breakup point.

Portage Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Portage Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with VBI Vaccines and Portage Biotech

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

The idea behind VBI Vaccines and Portage Biotech 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.