Correlation Between Exscientia and VectivBio Holding

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

By analyzing existing cross correlation between Exscientia Ltd ADR and VectivBio Holding AG, you can compare the effects of market volatilities on Exscientia and VectivBio Holding 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 Exscientia with a short position of VectivBio Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exscientia and VectivBio Holding.

Diversification Opportunities for Exscientia and VectivBio Holding

-0.3

Correlation Coefficient

Exscientia  VectivBio Holding

Very good diversification

The 3 months correlation between Exscientia and VectivBio is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Exscientia Ltd ADR and VectivBio Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VectivBio Holding and Exscientia 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 Exscientia Ltd ADR are associated (or correlated) with VectivBio Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VectivBio Holding has no effect on the direction of Exscientia i.e., Exscientia and VectivBio Holding go up and down completely randomly.

Pair Corralation between Exscientia and VectivBio Holding

If you would invest  491.00  in Exscientia Ltd ADR on August 31, 2024 and sell it today you would lose (7.00) from holding Exscientia Ltd ADR or give up 1.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.72%
Values	Daily Returns

Exscientia Ltd ADR  vs.  VectivBio Holding AG

Exscientia ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exscientia Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Exscientia is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

VectivBio Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VectivBio Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, VectivBio Holding is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Exscientia and VectivBio Holding

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

The idea behind Exscientia Ltd ADR and VectivBio Holding AG 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.