Correlation Between Vaxcyte and Cara Therapeutic
Can any of the company-specific risk be diversified away by investing in both Vaxcyte and Cara Therapeutic 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 Vaxcyte and Cara Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaxcyte and Cara Therapeutic, you can compare the effects of market volatilities on Vaxcyte and Cara Therapeutic 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 Vaxcyte with a short position of Cara Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaxcyte and Cara Therapeutic.
Diversification Opportunities for Vaxcyte and Cara Therapeutic
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vaxcyte and Cara is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vaxcyte and Cara Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cara Therapeutic and Vaxcyte 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 Vaxcyte are associated (or correlated) with Cara Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cara Therapeutic has no effect on the direction of Vaxcyte i.e., Vaxcyte and Cara Therapeutic go up and down completely randomly.
Pair Corralation between Vaxcyte and Cara Therapeutic
Given the investment horizon of 90 days Vaxcyte is expected to generate 0.47 times more return on investment than Cara Therapeutic. However, Vaxcyte is 2.12 times less risky than Cara Therapeutic. It trades about 0.06 of its potential returns per unit of risk. Cara Therapeutic is currently generating about -0.08 per unit of risk. If you would invest 4,433 in Vaxcyte on August 26, 2024 and sell it today you would earn a total of 4,421 from holding Vaxcyte or generate 99.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaxcyte vs. Cara Therapeutic
Performance |
| Timeline |
| Vaxcyte |
| Cara Therapeutic |
Vaxcyte and Cara Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaxcyte and Cara Therapeutic
The main advantage of trading using opposite Vaxcyte and Cara Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaxcyte position performs unexpectedly, Cara Therapeutic 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 Cara Therapeutic will offset losses from the drop in Cara Therapeutic's long position.| Vaxcyte vs. Eliem Therapeutics | Vaxcyte vs. HCW Biologics | Vaxcyte vs. Scpharmaceuticals | Vaxcyte vs. Milestone Pharmaceuticals |
| Cara Therapeutic vs. 22nd Century Group | Cara Therapeutic vs. Corbus Pharmaceuticals Holding | Cara Therapeutic vs. Cannabis Sativa | Cara Therapeutic vs. General Cannabis Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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