Correlation Between Icosavax and Cytokinetics

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

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

Diversification Opportunities for Icosavax and Cytokinetics

-0.35

Correlation Coefficient

Icosavax  Cytokinetics

Very good diversification

The 3 months correlation between Icosavax and Cytokinetics is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Icosavax and Cytokinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytokinetics and Icosavax 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 Icosavax are associated (or correlated) with Cytokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytokinetics has no effect on the direction of Icosavax i.e., Icosavax and Cytokinetics go up and down completely randomly.

Pair Corralation between Icosavax and Cytokinetics

If you would invest  902.00  in Icosavax on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Icosavax or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Icosavax  vs.  Cytokinetics

Icosavax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cytokinetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytokinetics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cytokinetics is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Icosavax and Cytokinetics

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

The idea behind Icosavax and Cytokinetics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.