Correlation Between Vericel Corp and Armata Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Vericel Corp and Armata Pharmaceuticals 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 Vericel Corp and Armata Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vericel Corp Ord and Armata Pharmaceuticals, you can compare the effects of market volatilities on Vericel Corp and Armata Pharmaceuticals 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 Vericel Corp with a short position of Armata Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vericel Corp and Armata Pharmaceuticals.
Diversification Opportunities for Vericel Corp and Armata Pharmaceuticals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vericel and Armata is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Armata Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armata Pharmaceuticals and Vericel Corp 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 Vericel Corp Ord are associated (or correlated) with Armata Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armata Pharmaceuticals has no effect on the direction of Vericel Corp i.e., Vericel Corp and Armata Pharmaceuticals go up and down completely randomly.
Pair Corralation between Vericel Corp and Armata Pharmaceuticals
Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 0.59 times more return on investment than Armata Pharmaceuticals. However, Vericel Corp Ord is 1.69 times less risky than Armata Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Armata Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest 4,904 in Vericel Corp Ord on November 2, 2024 and sell it today you would earn a total of 1,021 from holding Vericel Corp Ord or generate 20.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vericel Corp Ord vs. Armata Pharmaceuticals
Performance |
| Timeline |
| Vericel Corp Ord |
| Armata Pharmaceuticals |
Vericel Corp and Armata Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vericel Corp and Armata Pharmaceuticals
The main advantage of trading using opposite Vericel Corp and Armata Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp position performs unexpectedly, Armata Pharmaceuticals 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 Armata Pharmaceuticals will offset losses from the drop in Armata Pharmaceuticals' long position.| Vericel Corp vs. Collplant Biotechnologies | Vericel Corp vs. Keros Therapeutics | Vericel Corp vs. Merus BV | Vericel Corp vs. Century 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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