Correlation Between PTC Therapeutics and Viking Therapeutics
Can any of the company-specific risk be diversified away by investing in both PTC 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 PTC 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 PTC Therapeutics and Viking Therapeutics, you can compare the effects of market volatilities on PTC 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 PTC Therapeutics with a short position of Viking Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTC Therapeutics and Viking Therapeutics.
Diversification Opportunities for PTC Therapeutics and Viking Therapeutics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PTC and Viking is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PTC Therapeutics and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Therapeutics and PTC 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 PTC 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 PTC Therapeutics i.e., PTC Therapeutics and Viking Therapeutics go up and down completely randomly.
Pair Corralation between PTC Therapeutics and Viking Therapeutics
Given the investment horizon of 90 days PTC Therapeutics is expected to under-perform the Viking Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, PTC Therapeutics is 1.77 times less risky than Viking Therapeutics. The stock trades about -0.25 of its potential returns per unit of risk. The Viking Therapeutics is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,796 in Viking Therapeutics on January 9, 2025 and sell it today you would lose (486.00) from holding Viking Therapeutics or give up 17.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTC Therapeutics vs. Viking Therapeutics
Performance |
| Timeline |
| PTC Therapeutics |
| Viking Therapeutics |
PTC Therapeutics and Viking Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTC Therapeutics and Viking Therapeutics
The main advantage of trading using opposite PTC Therapeutics and Viking Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTC 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.| PTC Therapeutics vs. Krystal Biotech | PTC Therapeutics vs. Sarepta Therapeutics | PTC Therapeutics vs. Iovance Biotherapeutics | PTC Therapeutics vs. Madrigal Pharmaceuticals |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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