Correlation Between Centessa Pharmaceuticals and Evaxion Biotech
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals and Evaxion 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 Centessa Pharmaceuticals and Evaxion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and Evaxion Biotech AS, you can compare the effects of market volatilities on Centessa Pharmaceuticals and Evaxion 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 Centessa Pharmaceuticals with a short position of Evaxion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Evaxion Biotech.
Diversification Opportunities for Centessa Pharmaceuticals and Evaxion Biotech
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centessa and Evaxion is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Evaxion Biotech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evaxion Biotech AS and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC are associated (or correlated) with Evaxion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evaxion Biotech AS has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Evaxion Biotech go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Evaxion Biotech
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 0.68 times more return on investment than Evaxion Biotech. However, Centessa Pharmaceuticals PLC is 1.47 times less risky than Evaxion Biotech. It trades about 0.14 of its potential returns per unit of risk. Evaxion Biotech AS is currently generating about -0.08 per unit of risk. If you would invest 925.00 in Centessa Pharmaceuticals PLC on September 3, 2024 and sell it today you would earn a total of 866.00 from holding Centessa Pharmaceuticals PLC or generate 93.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Evaxion Biotech AS
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| Evaxion Biotech AS |
Centessa Pharmaceuticals and Evaxion Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and Evaxion Biotech
The main advantage of trading using opposite Centessa Pharmaceuticals and Evaxion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals position performs unexpectedly, Evaxion 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 Evaxion Biotech will offset losses from the drop in Evaxion Biotech's long position.The idea behind Centessa Pharmaceuticals PLC and Evaxion Biotech AS 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.
| Evaxion Biotech vs. DiaMedica Therapeutics | Evaxion Biotech vs. Lyra Therapeutics | Evaxion Biotech vs. Centessa Pharmaceuticals PLC |
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 the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |