Correlation Between Viking Therapeutics and Fortress Biotech
Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics and Fortress Biotech 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 Fortress Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Therapeutics and Fortress Biotech, you can compare the effects of market volatilities on Viking Therapeutics and Fortress Biotech 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 Fortress Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and Fortress Biotech.
Diversification Opportunities for Viking Therapeutics and Fortress Biotech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Viking and Fortress is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Fortress Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech 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 Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Fortress Biotech go up and down completely randomly.
Pair Corralation between Viking Therapeutics and Fortress Biotech
Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Fortress Biotech. In addition to that, Viking Therapeutics is 1.04 times more volatile than Fortress Biotech. It trades about -0.25 of its total potential returns per unit of risk. Fortress Biotech is currently generating about -0.04 per unit of volatility. If you would invest 194.00 in Fortress Biotech on August 31, 2024 and sell it today you would lose (11.00) from holding Fortress Biotech or give up 5.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viking Therapeutics vs. Fortress Biotech
Performance |
| Timeline |
| Viking Therapeutics |
| Fortress Biotech |
Viking Therapeutics and Fortress Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Therapeutics and Fortress Biotech
The main advantage of trading using opposite Viking Therapeutics and Fortress Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics position performs unexpectedly, Fortress Biotech 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 Fortress Biotech will offset losses from the drop in Fortress Biotech's long position.| Viking Therapeutics vs. Cue Biopharma | Viking Therapeutics vs. Eliem Therapeutics | Viking Therapeutics vs. Inhibrx | Viking Therapeutics vs. Molecular Partners AG |
| Fortress Biotech vs. Cue Biopharma | Fortress Biotech vs. Eliem Therapeutics | Fortress Biotech vs. Inhibrx | Fortress Biotech vs. Molecular Partners AG |
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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