Correlation Between CureVac NV and Karuna Therapeutics
Can any of the company-specific risk be diversified away by investing in both CureVac NV and Karuna Therapeutics 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 CureVac NV and Karuna Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CureVac NV and Karuna Therapeutics, you can compare the effects of market volatilities on CureVac NV and Karuna Therapeutics 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 CureVac NV with a short position of Karuna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CureVac NV and Karuna Therapeutics.
Diversification Opportunities for CureVac NV and Karuna Therapeutics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between CureVac and Karuna is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Karuna Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karuna Therapeutics and CureVac NV 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 CureVac NV are associated (or correlated) with Karuna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karuna Therapeutics has no effect on the direction of CureVac NV i.e., CureVac NV and Karuna Therapeutics go up and down completely randomly.
Pair Corralation between CureVac NV and Karuna Therapeutics
Given the investment horizon of 90 days CureVac NV is expected to under-perform the Karuna Therapeutics. In addition to that, CureVac NV is 2.64 times more volatile than Karuna Therapeutics. It trades about -0.05 of its total potential returns per unit of risk. Karuna Therapeutics is currently generating about -0.09 per unit of volatility. If you would invest 22,016 in Karuna Therapeutics on August 27, 2024 and sell it today you would lose (1,705) from holding Karuna Therapeutics or give up 7.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.99% |
| Values | Daily Returns |
CureVac NV vs. Karuna Therapeutics
Performance |
| Timeline |
| CureVac NV |
| Karuna Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CureVac NV and Karuna Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CureVac NV and Karuna Therapeutics
The main advantage of trading using opposite CureVac NV and Karuna Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CureVac NV position performs unexpectedly, Karuna Therapeutics 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 Karuna Therapeutics will offset losses from the drop in Karuna Therapeutics' long position.| CureVac NV vs. Eliem Therapeutics | CureVac NV vs. HCW Biologics | CureVac NV vs. Scpharmaceuticals | CureVac NV vs. Milestone Pharmaceuticals |
| Karuna Therapeutics vs. Blueprint Medicines Corp | Karuna Therapeutics vs. Amylyx Pharmaceuticals | Karuna Therapeutics vs. Day One Biopharmaceuticals | Karuna Therapeutics vs. X4 Pharmaceuticals |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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