Correlation Between Gilead Sciences and Evaxion Biotech
Can any of the company-specific risk be diversified away by investing in both Gilead Sciences 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 Gilead Sciences and Evaxion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilead Sciences and Evaxion Biotech AS, you can compare the effects of market volatilities on Gilead Sciences 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 Gilead Sciences with a short position of Evaxion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilead Sciences and Evaxion Biotech.
Diversification Opportunities for Gilead Sciences and Evaxion Biotech
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gilead and Evaxion is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gilead Sciences 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 Gilead Sciences 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 Gilead Sciences 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 Gilead Sciences i.e., Gilead Sciences and Evaxion Biotech go up and down completely randomly.
Pair Corralation between Gilead Sciences and Evaxion Biotech
Given the investment horizon of 90 days Gilead Sciences is expected to generate 0.27 times more return on investment than Evaxion Biotech. However, Gilead Sciences is 3.66 times less risky than Evaxion Biotech. It trades about 0.2 of its potential returns per unit of risk. Evaxion Biotech AS is currently generating about -0.07 per unit of risk. If you would invest 6,280 in Gilead Sciences on September 2, 2024 and sell it today you would earn a total of 2,978 from holding Gilead Sciences or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gilead Sciences vs. Evaxion Biotech AS
Performance |
| Timeline |
| Gilead Sciences |
| Evaxion Biotech AS |
Gilead Sciences and Evaxion Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilead Sciences and Evaxion Biotech
The main advantage of trading using opposite Gilead Sciences and Evaxion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilead Sciences 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.| Gilead Sciences vs. Amgen Inc | Gilead Sciences vs. Merck Company | Gilead Sciences vs. AbbVie Inc | Gilead Sciences vs. Johnson Johnson |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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