Correlation Between Viking Therapeutics and Protagonist Therapeutics
Can any of the company-specific risk be diversified away by investing in both Viking Therapeutics and Protagonist Therapeutics 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 Protagonist Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viking Therapeutics and Protagonist Therapeutics, you can compare the effects of market volatilities on Viking Therapeutics and Protagonist Therapeutics 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 Protagonist Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Therapeutics and Protagonist Therapeutics.
Diversification Opportunities for Viking Therapeutics and Protagonist Therapeutics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viking and Protagonist is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Viking Therapeutics and Protagonist Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagonist Therapeutics 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 Protagonist Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagonist Therapeutics has no effect on the direction of Viking Therapeutics i.e., Viking Therapeutics and Protagonist Therapeutics go up and down completely randomly.
Pair Corralation between Viking Therapeutics and Protagonist Therapeutics
Given the investment horizon of 90 days Viking Therapeutics is expected to under-perform the Protagonist Therapeutics. In addition to that, Viking Therapeutics is 1.21 times more volatile than Protagonist Therapeutics. It trades about -0.26 of its total potential returns per unit of risk. Protagonist Therapeutics is currently generating about -0.07 per unit of volatility. If you would invest 4,843 in Protagonist Therapeutics on August 30, 2024 and sell it today you would lose (348.00) from holding Protagonist Therapeutics or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viking Therapeutics vs. Protagonist Therapeutics
Performance |
| Timeline |
| Viking Therapeutics |
| Protagonist Therapeutics |
Viking Therapeutics and Protagonist Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viking Therapeutics and Protagonist Therapeutics
The main advantage of trading using opposite Viking Therapeutics and Protagonist Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Therapeutics position performs unexpectedly, Protagonist Therapeutics 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 Protagonist Therapeutics will offset losses from the drop in Protagonist Therapeutics' long position.| Viking Therapeutics vs. Terns Pharmaceuticals | Viking Therapeutics vs. Akero Therapeutics | Viking Therapeutics vs. Madrigal Pharmaceuticals | Viking Therapeutics vs. Sarepta Therapeutics |
| Protagonist Therapeutics vs. Revolution Medicines | Protagonist Therapeutics vs. Akero Therapeutics | Protagonist Therapeutics vs. Avidity Biosciences | Protagonist Therapeutics vs. Stoke 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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