Correlation Between Pulmatrix and VectivBio Holding

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

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

Diversification Opportunities for Pulmatrix and VectivBio Holding

0.45

Correlation Coefficient

Pulmatrix  VectivBio Holding

Very weak diversification

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

Pair Corralation between Pulmatrix and VectivBio Holding

If you would invest  196.00  in Pulmatrix on September 1, 2024 and sell it today you would earn a total of  468.00  from holding Pulmatrix or generate 238.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.79%
Values	Daily Returns

Pulmatrix  vs.  VectivBio Holding AG

Pulmatrix

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmatrix are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Pulmatrix displayed solid returns over the last few months and may actually be approaching a breakup point.

VectivBio Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VectivBio Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, VectivBio Holding is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pulmatrix and VectivBio Holding

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

The idea behind Pulmatrix and VectivBio Holding AG 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.