Correlation Between Viking Therapeutics and Curative Biotechnology
Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics and Curative Biotechnology 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 Viking Therapeutics and Curative Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Therapeutics and Curative Biotechnology, you can compare the effects of market volatilities on Viking Therapeutics and Curative Biotechnology 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 Viking Therapeutics with a short position of Curative Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and Curative Biotechnology.
Diversification Opportunities for Viking Therapeutics and Curative Biotechnology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viking and Curative is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Curative Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curative Biotechnology and Viking 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 Viking Therapeutics are associated (or correlated) with Curative Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curative Biotechnology has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Curative Biotechnology go up and down completely randomly.
Pair Corralation between Viking Therapeutics and Curative Biotechnology
Given the investment horizon of 90 days Viking Therapeutics is expected to generate 13.78 times less return on investment than Curative Biotechnology. But when comparing it to its historical volatility, Viking Therapeutics is 10.03 times less risky than Curative Biotechnology. It trades about 0.06 of its potential returns per unit of risk. Curative Biotechnology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Curative Biotechnology on November 9, 2024 and sell it today you would lose (1.25) from holding Curative Biotechnology or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.74% |
| Values | Daily Returns |
Viking Therapeutics vs. Curative Biotechnology
Performance |
| Timeline |
| Viking Therapeutics |
| Curative Biotechnology |
Viking Therapeutics and Curative Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Therapeutics and Curative Biotechnology
The main advantage of trading using opposite Viking Therapeutics and Curative Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics position performs unexpectedly, Curative Biotechnology 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 Curative Biotechnology will offset losses from the drop in Curative Biotechnology's long position.| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta Therapeutics |
| Curative Biotechnology vs. Biotron Limited | Curative Biotechnology vs. biOasis Technologies | Curative Biotechnology vs. Covalon Technologies | Curative Biotechnology vs. Mosaic Immunoengineering |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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