Correlation Between Seres Therapeutics and Viking Therapeutics
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics and Viking 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 Seres Therapeutics and Viking Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Viking Therapeutics, you can compare the effects of market volatilities on Seres Therapeutics and Viking 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 Seres Therapeutics with a short position of Viking Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Viking Therapeutics.
Diversification Opportunities for Seres Therapeutics and Viking Therapeutics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seres and Viking is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Therapeutics and Seres 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 Seres Therapeutics are associated (or correlated) with Viking Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Therapeutics has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Viking Therapeutics go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Viking Therapeutics
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 0.98 times more return on investment than Viking Therapeutics. However, Seres Therapeutics is 1.02 times less risky than Viking Therapeutics. It trades about -0.38 of its potential returns per unit of risk. Viking Therapeutics is currently generating about -0.39 per unit of risk. If you would invest 97.00 in Seres Therapeutics on October 23, 2024 and sell it today you would lose (23.90) from holding Seres Therapeutics or give up 24.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Viking Therapeutics
Performance |
| Timeline |
| Seres Therapeutics |
| Viking Therapeutics |
Seres Therapeutics and Viking Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Viking Therapeutics
The main advantage of trading using opposite Seres Therapeutics and Viking Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics position performs unexpectedly, Viking 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 Viking Therapeutics will offset losses from the drop in Viking Therapeutics' long position.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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