Correlation Between Vascular Biogenics and Vaccinex

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

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

Diversification Opportunities for Vascular Biogenics and Vaccinex

0.28

Correlation Coefficient

Vascular Biogenics  Vaccinex

Modest diversification

The 3 months correlation between Vascular and Vaccinex is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vascular Biogenics and Vaccinex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaccinex and Vascular Biogenics 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 Vascular Biogenics are associated (or correlated) with Vaccinex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaccinex has no effect on the direction of Vascular Biogenics i.e., Vascular Biogenics and Vaccinex go up and down completely randomly.

Pair Corralation between Vascular Biogenics and Vaccinex

Given the investment horizon of 90 days Vascular Biogenics is expected to generate 0.85 times more return on investment than Vaccinex. However, Vascular Biogenics is 1.17 times less risky than Vaccinex. It trades about -0.13 of its potential returns per unit of risk. Vaccinex is currently generating about -0.14 per unit of risk. If you would invest  29.00  in Vascular Biogenics on January 24, 2024 and sell it today you would lose (13.00) from holding Vascular Biogenics or give up 44.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	30.81%
Values	Daily Returns

Vascular Biogenics  vs.  Vaccinex

Vascular Biogenics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vascular Biogenics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Vascular Biogenics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vascular Biogenics and Vaccinex

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

The idea behind Vascular Biogenics and Vaccinex 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.