Correlation Between Viking Therapeutics and Alpha Tau

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Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics and Alpha Tau 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 Alpha Tau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Therapeutics and Alpha Tau Medical, you can compare the effects of market volatilities on Viking Therapeutics and Alpha Tau 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 Alpha Tau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and Alpha Tau.

Diversification Opportunities for Viking Therapeutics and Alpha Tau

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Viking and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Alpha Tau Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Tau Medical 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 Alpha Tau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Tau Medical has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Alpha Tau go up and down completely randomly.

Pair Corralation between Viking Therapeutics and Alpha Tau

Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Alpha Tau. In addition to that, Viking Therapeutics is 1.47 times more volatile than Alpha Tau Medical. It trades about -0.35 of its total potential returns per unit of risk. Alpha Tau Medical is currently generating about 0.22 per unit of volatility. If you would invest  221.00  in Alpha Tau Medical on August 28, 2024 and sell it today you would earn a total of  32.00  from holding Alpha Tau Medical or generate 14.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Viking Therapeutics  vs.  Alpha Tau Medical

 Performance 
       Timeline  
Viking Therapeutics 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Viking Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Alpha Tau Medical 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Tau Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Alpha Tau unveiled solid returns over the last few months and may actually be approaching a breakup point.

Viking Therapeutics and Alpha Tau Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Viking Therapeutics and Alpha Tau

The main advantage of trading using opposite Viking Therapeutics and Alpha Tau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics position performs unexpectedly, Alpha Tau 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 Alpha Tau will offset losses from the drop in Alpha Tau's long position.
The idea behind Viking Therapeutics and Alpha Tau Medical 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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