Correlation Between CureVac NV and Vir Biotechnology
Can any of the company-specific risk be diversified away by investing in both CureVac NV and Vir Biotechnology 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 Vir Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CureVac NV and Vir Biotechnology, you can compare the effects of market volatilities on CureVac NV and Vir Biotechnology 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 Vir Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CureVac NV and Vir Biotechnology.
Diversification Opportunities for CureVac NV and Vir Biotechnology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CureVac and Vir is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Vir Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vir Biotechnology 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 Vir Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vir Biotechnology has no effect on the direction of CureVac NV i.e., CureVac NV and Vir Biotechnology go up and down completely randomly.
Pair Corralation between CureVac NV and Vir Biotechnology
Given the investment horizon of 90 days CureVac NV is expected to under-perform the Vir Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, CureVac NV is 1.06 times less risky than Vir Biotechnology. The stock trades about -0.06 of its potential returns per unit of risk. The Vir Biotechnology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,063 in Vir Biotechnology on August 30, 2024 and sell it today you would lose (277.00) from holding Vir Biotechnology or give up 26.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CureVac NV vs. Vir Biotechnology
Performance |
| Timeline |
| CureVac NV |
| Vir Biotechnology |
CureVac NV and Vir Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CureVac NV and Vir Biotechnology
The main advantage of trading using opposite CureVac NV and Vir Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CureVac NV position performs unexpectedly, Vir Biotechnology 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 Vir Biotechnology will offset losses from the drop in Vir Biotechnology's long position.| CureVac NV vs. Ikena Oncology | CureVac NV vs. Eliem Therapeutics | CureVac NV vs. HCW Biologics | CureVac NV vs. Tempest Therapeutics |
| Vir Biotechnology vs. CureVac NV | Vir Biotechnology vs. Krystal Biotech | Vir Biotechnology vs. Propanc Biopharma | Vir Biotechnology vs. Blueprint Medicines Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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