Correlation Between Relief Therapeutics and VAT Group
Can any of the company-specific risk be diversified away by investing in both Relief Therapeutics and VAT Group 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 Relief Therapeutics and VAT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Relief Therapeutics Holding and VAT Group AG, you can compare the effects of market volatilities on Relief Therapeutics and VAT Group 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 Relief Therapeutics with a short position of VAT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relief Therapeutics and VAT Group.
Diversification Opportunities for Relief Therapeutics and VAT Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Relief and VAT is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Relief Therapeutics Holding and VAT Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAT Group AG and Relief 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 Relief Therapeutics Holding are associated (or correlated) with VAT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAT Group AG has no effect on the direction of Relief Therapeutics i.e., Relief Therapeutics and VAT Group go up and down completely randomly.
Pair Corralation between Relief Therapeutics and VAT Group
Assuming the 90 days trading horizon Relief Therapeutics Holding is expected to generate 4.11 times more return on investment than VAT Group. However, Relief Therapeutics is 4.11 times more volatile than VAT Group AG. It trades about 0.16 of its potential returns per unit of risk. VAT Group AG is currently generating about -0.1 per unit of risk. If you would invest 117.00 in Relief Therapeutics Holding on September 3, 2024 and sell it today you would earn a total of 383.00 from holding Relief Therapeutics Holding or generate 327.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Relief Therapeutics Holding vs. VAT Group AG
Performance |
| Timeline |
| Relief Therapeutics |
| VAT Group AG |
Relief Therapeutics and VAT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Relief Therapeutics and VAT Group
The main advantage of trading using opposite Relief Therapeutics and VAT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relief Therapeutics position performs unexpectedly, VAT Group 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 VAT Group will offset losses from the drop in VAT Group's long position.| Relief Therapeutics vs. VAT Group AG | Relief Therapeutics vs. Lonza Group AG | Relief Therapeutics vs. Basilea Pharmaceutica AG | Relief Therapeutics vs. Straumann Holding AG |
| VAT Group vs. Sika AG | VAT Group vs. Straumann Holding AG | VAT Group vs. Geberit AG | VAT Group vs. Partners Group Holding |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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