Correlation Between Vg Life and Adagene
Can any of the company-specific risk be diversified away by investing in both Vg Life and Adagene 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 Vg Life and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vg Life Sciences and Adagene, you can compare the effects of market volatilities on Vg Life and Adagene 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 Vg Life with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vg Life and Adagene.
Diversification Opportunities for Vg Life and Adagene
Good diversification
The 3 months correlation between VGLS and Adagene is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vg Life Sciences and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Vg Life 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 Vg Life Sciences are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Vg Life i.e., Vg Life and Adagene go up and down completely randomly.
Pair Corralation between Vg Life and Adagene
Given the investment horizon of 90 days Vg Life Sciences is expected to generate 52.52 times more return on investment than Adagene. However, Vg Life is 52.52 times more volatile than Adagene. It trades about 0.33 of its potential returns per unit of risk. Adagene is currently generating about 0.05 per unit of risk. If you would invest 0.01 in Vg Life Sciences on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Vg Life Sciences or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Vg Life Sciences vs. Adagene
Performance |
| Timeline |
| Vg Life Sciences |
| Adagene |
Vg Life and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vg Life and Adagene
The main advantage of trading using opposite Vg Life and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vg Life position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Vg Life vs. Health Sciences Gr | Vg Life vs. PsyBio Therapeutics Corp | Vg Life vs. Sino Biopharmaceutical Limited | Vg Life vs. Regen BioPharma |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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