Correlation Between PepGen and Vaccinex

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

By analyzing existing cross correlation between PepGen and Vaccinex, you can compare the effects of market volatilities on PepGen and Vaccinex 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 Vaccinex. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepGen and Vaccinex.

Diversification Opportunities for PepGen and Vaccinex

-0.03

Correlation Coefficient

PepGen  Vaccinex

Good diversification

The 3 months correlation between PepGen and Vaccinex is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Vaccinex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaccinex 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 Vaccinex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaccinex has no effect on the direction of PepGen i.e., PepGen and Vaccinex go up and down completely randomly.

Pair Corralation between PepGen and Vaccinex

Given the investment horizon of 90 days PepGen is expected to under-perform the Vaccinex. But the stock apears to be less risky and, when comparing its historical volatility, PepGen is 2.12 times less risky than Vaccinex. The stock trades about -0.18 of its potential returns per unit of risk. The Vaccinex is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  340.00  in Vaccinex on September 29, 2024 and sell it today you would lose (228.00) from holding Vaccinex or give up 67.06% of portfolio value over 90 days.

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

PepGen  vs.  Vaccinex

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.

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PepGen and Vaccinex

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

The idea behind PepGen and Vaccinex 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.