Correlation Between Hookipa Pharma and Vincerx Pharma

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

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

Diversification Opportunities for Hookipa Pharma and Vincerx Pharma

0.84

Correlation Coefficient

Hookipa Pharma  Vincerx Pharma

Very poor diversification

The 3 months correlation between Hookipa and Vincerx is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hookipa Pharma and Vincerx Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincerx Pharma and Hookipa Pharma 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 Hookipa Pharma are associated (or correlated) with Vincerx Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincerx Pharma has no effect on the direction of Hookipa Pharma i.e., Hookipa Pharma and Vincerx Pharma go up and down completely randomly.

Pair Corralation between Hookipa Pharma and Vincerx Pharma

Given the investment horizon of 90 days Hookipa Pharma is expected to under-perform the Vincerx Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Hookipa Pharma is 1.46 times less risky than Vincerx Pharma. The stock trades about -0.02 of its potential returns per unit of risk. The Vincerx Pharma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Vincerx Pharma on September 14, 2024 and sell it today you would lose (86.00) from holding Vincerx Pharma or give up 81.9% of portfolio value over 90 days.

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

Hookipa Pharma  vs.  Vincerx Pharma

Hookipa Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hookipa Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Vincerx Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vincerx Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hookipa Pharma and Vincerx Pharma

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

The idea behind Hookipa Pharma and Vincerx Pharma 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.