Correlation Between Geron and Vaxcyte

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Can any of the company-specific risk be diversified away by investing in both Geron and Vaxcyte 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 Geron and Vaxcyte into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geron and Vaxcyte, you can compare the effects of market volatilities on Geron and Vaxcyte 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 Geron with a short position of Vaxcyte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Vaxcyte.

Diversification Opportunities for Geron and Vaxcyte

GeronVaxcyteDiversified AwayGeronVaxcyteDiversified Away100%
0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Geron and Vaxcyte is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Vaxcyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxcyte and Geron 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 Geron are associated (or correlated) with Vaxcyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxcyte has no effect on the direction of Geron i.e., Geron and Vaxcyte go up and down completely randomly.

Pair Corralation between Geron and Vaxcyte

Given the investment horizon of 90 days Geron is expected to under-perform the Vaxcyte. But the stock apears to be less risky and, when comparing its historical volatility, Geron is 1.16 times less risky than Vaxcyte. The stock trades about -0.3 of its potential returns per unit of risk. The Vaxcyte is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  9,145  in Vaxcyte on November 26, 2024 and sell it today you would lose (1,171) from holding Vaxcyte or give up 12.8% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Geron  vs.  Vaxcyte

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50510
JavaScript chart by amCharts 3.21.15GERN PCVX
       Timeline  
Geron 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Geron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.533.54
Vaxcyte 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Vaxcyte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb80859095

Geron and Vaxcyte Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.63-3.47-2.3-1.14-0.01590.921.882.833.784.74 0.0350.0400.0450.0500.055
JavaScript chart by amCharts 3.21.15GERN PCVX
       Returns  

Pair Trading with Geron and Vaxcyte

The main advantage of trading using opposite Geron and Vaxcyte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron position performs unexpectedly, Vaxcyte 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 Vaxcyte will offset losses from the drop in Vaxcyte's long position.
The idea behind Geron and Vaxcyte pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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