Correlation Between Vaxxinity and Northwest Biotherapeutics

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

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

Diversification Opportunities for Vaxxinity and Northwest Biotherapeutics

-0.28

Correlation Coefficient

Vaxxinity  Northwest Biotherapeutics

Very good diversification

The 3 months correlation between Vaxxinity and Northwest is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vaxxinity and Northwest Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Biotherapeutics and Vaxxinity 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 Vaxxinity are associated (or correlated) with Northwest Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Biotherapeutics has no effect on the direction of Vaxxinity i.e., Vaxxinity and Northwest Biotherapeutics go up and down completely randomly.

Pair Corralation between Vaxxinity and Northwest Biotherapeutics

If you would invest  272.00  in Vaxxinity on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Vaxxinity or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Vaxxinity  vs.  Northwest Biotherapeutics

Vaxxinity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Northwest Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northwest Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Vaxxinity and Northwest Biotherapeutics

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

The idea behind Vaxxinity and Northwest Biotherapeutics 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.