Correlation Between PepGen and Vigil Neuroscience

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

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

Diversification Opportunities for PepGen and Vigil Neuroscience

0.45

Correlation Coefficient

PepGen  Vigil Neuroscience

Very weak diversification

The 3 months correlation between PepGen and Vigil is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Vigil Neuroscience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vigil Neuroscience 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 Vigil Neuroscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vigil Neuroscience has no effect on the direction of PepGen i.e., PepGen and Vigil Neuroscience go up and down completely randomly.

Pair Corralation between PepGen and Vigil Neuroscience

Given the investment horizon of 90 days PepGen is expected to generate 1.06 times more return on investment than Vigil Neuroscience. However, PepGen is 1.06 times more volatile than Vigil Neuroscience. It trades about -0.07 of its potential returns per unit of risk. Vigil Neuroscience is currently generating about -0.12 per unit of risk. If you would invest  886.00  in PepGen on September 5, 2024 and sell it today you would lose (251.00) from holding PepGen or give up 28.33% of portfolio value over 90 days.

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

PepGen  vs.  Vigil Neuroscience

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.

Vigil Neuroscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vigil Neuroscience has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with PepGen and Vigil Neuroscience

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

The idea behind PepGen and Vigil Neuroscience 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.