Correlation Between Evaxion Biotech and Sigilon Therapeutics

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

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

Diversification Opportunities for Evaxion Biotech and Sigilon Therapeutics

-0.76

Correlation Coefficient

Evaxion Biotech  Sigilon Therapeutics

Pay attention - limited upside

The 3 months correlation between Evaxion and Sigilon is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Evaxion Biotech AS and Sigilon Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigilon Therapeutics and Evaxion Biotech 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 Evaxion Biotech AS are associated (or correlated) with Sigilon Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigilon Therapeutics has no effect on the direction of Evaxion Biotech i.e., Evaxion Biotech and Sigilon Therapeutics go up and down completely randomly.

Pair Corralation between Evaxion Biotech and Sigilon Therapeutics

If you would invest  2,111  in Sigilon Therapeutics on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Sigilon Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.4%
Values	Daily Returns

Evaxion Biotech AS  vs.  Sigilon Therapeutics

Evaxion Biotech AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evaxion Biotech AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Sigilon Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sigilon Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sigilon Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Evaxion Biotech and Sigilon Therapeutics

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

The idea behind Evaxion Biotech AS and Sigilon 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.