Correlation Between Decibel Therapeutics and Evaxion Biotech
Can any of the company-specific risk be diversified away by investing in both Decibel Therapeutics 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 Decibel Therapeutics and Evaxion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Decibel Therapeutics and Evaxion Biotech AS, you can compare the effects of market volatilities on Decibel Therapeutics 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 Decibel Therapeutics with a short position of Evaxion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Decibel Therapeutics and Evaxion Biotech.
Diversification Opportunities for Decibel Therapeutics and Evaxion Biotech
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Decibel and Evaxion is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Decibel Therapeutics 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 Decibel Therapeutics 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 Decibel Therapeutics 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 Decibel Therapeutics i.e., Decibel Therapeutics and Evaxion Biotech go up and down completely randomly.
Pair Corralation between Decibel Therapeutics and Evaxion Biotech
Given the investment horizon of 90 days Decibel Therapeutics is expected to generate 0.71 times more return on investment than Evaxion Biotech. However, Decibel Therapeutics is 1.4 times less risky than Evaxion Biotech. It trades about 0.05 of its potential returns per unit of risk. Evaxion Biotech AS is currently generating about -0.02 per unit of risk. If you would invest 253.00 in Decibel Therapeutics on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Decibel Therapeutics or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
Decibel Therapeutics vs. Evaxion Biotech AS
Performance |
| Timeline |
| Decibel Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Evaxion Biotech AS |
Decibel Therapeutics and Evaxion Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Decibel Therapeutics and Evaxion Biotech
The main advantage of trading using opposite Decibel Therapeutics and Evaxion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Decibel Therapeutics 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.| Decibel Therapeutics vs. Werewolf Therapeutics | Decibel Therapeutics vs. Edgewise Therapeutics | Decibel Therapeutics vs. Celcuity LLC | Decibel Therapeutics vs. C4 Therapeutics |
| Evaxion Biotech vs. Tff Pharmaceuticals | Evaxion Biotech vs. Eliem Therapeutics | Evaxion Biotech vs. Inhibrx | Evaxion Biotech vs. Enliven Therapeutics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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