Correlation Between Rezolute and PepGen
Can any of the company-specific risk be diversified away by investing in both Rezolute and PepGen 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 Rezolute and PepGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rezolute and PepGen, you can compare the effects of market volatilities on Rezolute and PepGen 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 Rezolute with a short position of PepGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rezolute and PepGen.
Diversification Opportunities for Rezolute and PepGen
Excellent diversification
The 3 months correlation between Rezolute and PepGen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Rezolute and PepGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepGen and Rezolute 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 Rezolute are associated (or correlated) with PepGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepGen has no effect on the direction of Rezolute i.e., Rezolute and PepGen go up and down completely randomly.
Pair Corralation between Rezolute and PepGen
Given the investment horizon of 90 days Rezolute is expected to generate 0.86 times more return on investment than PepGen. However, Rezolute is 1.17 times less risky than PepGen. It trades about 0.07 of its potential returns per unit of risk. PepGen is currently generating about 0.0 per unit of risk. If you would invest 156.00 in Rezolute on August 28, 2024 and sell it today you would earn a total of 330.00 from holding Rezolute or generate 211.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rezolute vs. PepGen
Performance |
| Timeline |
| Rezolute |
| PepGen |
Rezolute and PepGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rezolute and PepGen
The main advantage of trading using opposite Rezolute and PepGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rezolute position performs unexpectedly, PepGen 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 PepGen will offset losses from the drop in PepGen's long position.The idea behind Rezolute and PepGen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PepGen vs. Pmv Pharmaceuticals | PepGen vs. Eliem Therapeutics | PepGen vs. MediciNova | PepGen vs. Pharvaris BV |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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