Correlation Between VBI Vaccines and Cannae Holdings

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

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

Diversification Opportunities for VBI Vaccines and Cannae Holdings

-0.65

Correlation Coefficient

VBI Vaccines  Cannae Holdings

Excellent diversification

The 3 months correlation between VBI and Cannae is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding VBI Vaccines and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae Holdings and VBI Vaccines 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 VBI Vaccines are associated (or correlated) with Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of VBI Vaccines i.e., VBI Vaccines and Cannae Holdings go up and down completely randomly.

Pair Corralation between VBI Vaccines and Cannae Holdings

Assuming the 90 days horizon VBI Vaccines is expected to generate 28.72 times more return on investment than Cannae Holdings. However, VBI Vaccines is 28.72 times more volatile than Cannae Holdings. It trades about 0.03 of its potential returns per unit of risk. Cannae Holdings is currently generating about -0.38 per unit of risk. If you would invest  0.08  in VBI Vaccines on September 28, 2024 and sell it today you would lose (0.03) from holding VBI Vaccines or give up 37.5% of portfolio value over 90 days.

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

VBI Vaccines  vs.  Cannae Holdings

VBI Vaccines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VBI Vaccines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Cannae Holdings

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cannae Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Cannae Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VBI Vaccines and Cannae Holdings

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

The idea behind VBI Vaccines and Cannae Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.