Correlation Between PepGen and Larimar Therapeutics
Can any of the company-specific risk be diversified away by investing in both PepGen and Larimar 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 PepGen and Larimar Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepGen and Larimar Therapeutics, you can compare the effects of market volatilities on PepGen and Larimar 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 PepGen with a short position of Larimar Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepGen and Larimar Therapeutics.
Diversification Opportunities for PepGen and Larimar Therapeutics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PepGen and Larimar is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Larimar Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Larimar Therapeutics and PepGen 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 PepGen are associated (or correlated) with Larimar Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Larimar Therapeutics has no effect on the direction of PepGen i.e., PepGen and Larimar Therapeutics go up and down completely randomly.
Pair Corralation between PepGen and Larimar Therapeutics
Given the investment horizon of 90 days PepGen is expected to generate 4.57 times more return on investment than Larimar Therapeutics. However, PepGen is 4.57 times more volatile than Larimar Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Larimar Therapeutics is currently generating about -0.18 per unit of risk. If you would invest 197.00 in PepGen on November 29, 2024 and sell it today you would earn a total of 3.00 from holding PepGen or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
PepGen vs. Larimar Therapeutics
Performance |
| Timeline |
| PepGen |
| Larimar Therapeutics |
PepGen and Larimar Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepGen and Larimar Therapeutics
The main advantage of trading using opposite PepGen and Larimar Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepGen position performs unexpectedly, Larimar 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 Larimar Therapeutics will offset losses from the drop in Larimar Therapeutics' long position.| PepGen vs. Pmv Pharmaceuticals | PepGen vs. MediciNova | PepGen vs. Pharvaris BV | PepGen vs. Molecular Partners AG |
| Larimar Therapeutics vs. Vaxcyte | Larimar Therapeutics vs. Syndax Pharmaceuticals | Larimar Therapeutics vs. Merus BV | Larimar Therapeutics vs. Sutro Biopharma |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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