Correlation Between Alpha Cognition and Viking Therapeutics

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

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

Diversification Opportunities for Alpha Cognition and Viking Therapeutics

-0.43

Correlation Coefficient

Alpha Cognition  Viking Therapeutics

Very good diversification

The 3 months correlation between Alpha and Viking is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Cognition Common and Viking Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Therapeutics and Alpha Cognition 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 Alpha Cognition Common are associated (or correlated) with Viking Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Therapeutics has no effect on the direction of Alpha Cognition i.e., Alpha Cognition and Viking Therapeutics go up and down completely randomly.

Pair Corralation between Alpha Cognition and Viking Therapeutics

Given the investment horizon of 90 days Alpha Cognition Common is expected to under-perform the Viking Therapeutics. In addition to that, Alpha Cognition is 1.58 times more volatile than Viking Therapeutics. It trades about -0.18 of its total potential returns per unit of risk. Viking Therapeutics is currently generating about -0.11 per unit of volatility. If you would invest  6,501  in Viking Therapeutics on September 21, 2024 and sell it today you would lose (2,352) from holding Viking Therapeutics or give up 36.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	44.44%
Values	Daily Returns

Alpha Cognition Common  vs.  Viking Therapeutics

Alpha Cognition Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Cognition Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Viking Therapeutics

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alpha Cognition and Viking Therapeutics

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

The idea behind Alpha Cognition Common and Viking Therapeutics 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 CEOs Directory module to screen CEOs from public companies around the world.