Correlation Between PepGen and First Wave

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

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

Diversification Opportunities for PepGen and First Wave

0.93

Correlation Coefficient

PepGen  First Wave

Almost no diversification

The 3 months correlation between PepGen and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and First Wave BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Wave BioPharma and PepGen 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 PepGen are associated (or correlated) with First Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Wave BioPharma has no effect on the direction of PepGen i.e., PepGen and First Wave go up and down completely randomly.

Pair Corralation between PepGen and First Wave

If you would invest  61.00  in First Wave BioPharma on September 29, 2024 and sell it today you would earn a total of  0.00  from holding First Wave BioPharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.59%
Values	Daily Returns

PepGen  vs.  First Wave BioPharma

PepGen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PepGen 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.

First Wave BioPharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Wave BioPharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, First Wave is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with PepGen and First Wave

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

The idea behind PepGen and First Wave BioPharma 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 Commodity Directory module to find actively traded commodities issued by global exchanges.