Correlation Between Evaxion Biotech and Seres Therapeutics
Can any of the company-specific risk be diversified away by investing in both Evaxion Biotech and Seres 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 Seres 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 Seres Therapeutics, you can compare the effects of market volatilities on Evaxion Biotech and Seres 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 Seres Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evaxion Biotech and Seres Therapeutics.
Diversification Opportunities for Evaxion Biotech and Seres Therapeutics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evaxion and Seres is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Evaxion Biotech AS and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres 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 Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Evaxion Biotech i.e., Evaxion Biotech and Seres Therapeutics go up and down completely randomly.
Pair Corralation between Evaxion Biotech and Seres Therapeutics
Given the investment horizon of 90 days Evaxion Biotech AS is expected to under-perform the Seres Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Evaxion Biotech AS is 1.17 times less risky than Seres Therapeutics. The stock trades about -0.14 of its potential returns per unit of risk. The Seres Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 78.00 in Seres Therapeutics on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Seres Therapeutics or generate 25.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evaxion Biotech AS vs. Seres Therapeutics
Performance |
| Timeline |
| Evaxion Biotech AS |
| Seres Therapeutics |
Evaxion Biotech and Seres Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evaxion Biotech and Seres Therapeutics
The main advantage of trading using opposite Evaxion Biotech and Seres Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evaxion Biotech position performs unexpectedly, Seres 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 Seres Therapeutics will offset losses from the drop in Seres Therapeutics' long position.| Evaxion Biotech vs. DiaMedica Therapeutics | Evaxion Biotech vs. Lyra Therapeutics | Evaxion Biotech vs. Centessa Pharmaceuticals PLC |
| Seres Therapeutics vs. DiaMedica Therapeutics | Seres Therapeutics vs. Lyra Therapeutics | Seres Therapeutics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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