Correlation Between Viridian Therapeutics and Aptamer Group

Can any of the company-specific risk be diversified away by investing in both Viridian Therapeutics and Aptamer Group 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 Viridian Therapeutics and Aptamer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Viridian Therapeutics and Aptamer Group PLC, you can compare the effects of market volatilities on Viridian Therapeutics and Aptamer Group 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 Viridian Therapeutics with a short position of Aptamer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viridian Therapeutics and Aptamer Group.

Diversification Opportunities for Viridian Therapeutics and Aptamer Group

-0.62

Correlation Coefficient

Viridian Therapeutics  Aptamer Group

Excellent diversification

The 3 months correlation between Viridian and Aptamer is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Viridian Therapeutics and Aptamer Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptamer Group PLC and Viridian 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 Viridian Therapeutics are associated (or correlated) with Aptamer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptamer Group PLC has no effect on the direction of Viridian Therapeutics i.e., Viridian Therapeutics and Aptamer Group go up and down completely randomly.

Pair Corralation between Viridian Therapeutics and Aptamer Group

Assuming the 90 days trading horizon Viridian Therapeutics is expected to under-perform the Aptamer Group. But the stock apears to be less risky and, when comparing its historical volatility, Viridian Therapeutics is 1.21 times less risky than Aptamer Group. The stock trades about -0.03 of its potential returns per unit of risk. The Aptamer Group PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Aptamer Group PLC on September 13, 2024 and sell it today you would earn a total of  12.00  from holding Aptamer Group PLC or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Viridian Therapeutics  vs.  Aptamer Group PLC

Viridian Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viridian 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Aptamer Group PLC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptamer Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aptamer Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viridian Therapeutics and Aptamer Group

The main advantage of trading using opposite Viridian Therapeutics and Aptamer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viridian Therapeutics position performs unexpectedly, Aptamer Group 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 Aptamer Group will offset losses from the drop in Aptamer Group's long position.

The idea behind Viridian Therapeutics and Aptamer Group PLC 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.