Correlation Between Evaxion Biotech and Decibel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Evaxion Biotech and Decibel 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 Evaxion Biotech and Decibel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evaxion Biotech AS and Decibel Therapeutics, you can compare the effects of market volatilities on Evaxion Biotech and Decibel 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 Evaxion Biotech with a short position of Decibel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evaxion Biotech and Decibel Therapeutics.
Diversification Opportunities for Evaxion Biotech and Decibel Therapeutics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Evaxion and Decibel is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Evaxion Biotech AS and Decibel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decibel Therapeutics and Evaxion Biotech 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 Evaxion Biotech AS are associated (or correlated) with Decibel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decibel Therapeutics has no effect on the direction of Evaxion Biotech i.e., Evaxion Biotech and Decibel Therapeutics go up and down completely randomly.
Pair Corralation between Evaxion Biotech and Decibel Therapeutics
Given the investment horizon of 90 days Evaxion Biotech AS is expected to under-perform the Decibel Therapeutics. In addition to that, Evaxion Biotech is 1.4 times more volatile than Decibel Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Decibel Therapeutics is currently generating about 0.05 per unit of volatility. 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 |
Evaxion Biotech AS vs. Decibel Therapeutics
Performance |
| Timeline |
| Evaxion Biotech AS |
| Decibel Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Evaxion Biotech and Decibel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evaxion Biotech and Decibel Therapeutics
The main advantage of trading using opposite Evaxion Biotech and Decibel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evaxion Biotech position performs unexpectedly, Decibel 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 Decibel Therapeutics will offset losses from the drop in Decibel Therapeutics' long position.| Evaxion Biotech vs. Tff Pharmaceuticals | Evaxion Biotech vs. Eliem Therapeutics | Evaxion Biotech vs. Inhibrx | Evaxion Biotech vs. Enliven Therapeutics |
| Decibel Therapeutics vs. Werewolf Therapeutics | Decibel Therapeutics vs. Edgewise Therapeutics | Decibel Therapeutics vs. Celcuity LLC | Decibel Therapeutics vs. C4 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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