Correlation Between Vaccinex and MEI Pharma
Can any of the company-specific risk be diversified away by investing in both Vaccinex and MEI Pharma 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 Vaccinex and MEI Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaccinex and MEI Pharma, you can compare the effects of market volatilities on Vaccinex and MEI Pharma 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 Vaccinex with a short position of MEI Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaccinex and MEI Pharma.
Diversification Opportunities for Vaccinex and MEI Pharma
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vaccinex and MEI is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vaccinex and MEI Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEI Pharma and Vaccinex 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 Vaccinex are associated (or correlated) with MEI Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEI Pharma has no effect on the direction of Vaccinex i.e., Vaccinex and MEI Pharma go up and down completely randomly.
Pair Corralation between Vaccinex and MEI Pharma
Given the investment horizon of 90 days Vaccinex is expected to generate 6.01 times more return on investment than MEI Pharma. However, Vaccinex is 6.01 times more volatile than MEI Pharma. It trades about 0.02 of its potential returns per unit of risk. MEI Pharma is currently generating about -0.35 per unit of risk. If you would invest 374.00 in Vaccinex on August 28, 2024 and sell it today you would lose (18.00) from holding Vaccinex or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaccinex vs. MEI Pharma
Performance |
| Timeline |
| Vaccinex |
| MEI Pharma |
Vaccinex and MEI Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaccinex and MEI Pharma
The main advantage of trading using opposite Vaccinex and MEI Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaccinex position performs unexpectedly, MEI Pharma 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 MEI Pharma will offset losses from the drop in MEI Pharma's long position.| Vaccinex vs. Protara Therapeutics | Vaccinex vs. Monopar Therapeutics | Vaccinex vs. Surrozen | Vaccinex vs. Salarius Pharmaceuticals |
| MEI Pharma vs. Kezar Life Sciences | MEI Pharma vs. Vincerx Pharma | MEI Pharma vs. Avenue Therapeutics | MEI Pharma vs. Assembly Biosciences |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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