Correlation Between Vaccinex and Calithera Biosciences

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

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

Diversification Opportunities for Vaccinex and Calithera Biosciences

-0.69

Correlation Coefficient

Vaccinex  Calithera Biosciences

Excellent diversification

The 3 months correlation between Vaccinex and Calithera is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vaccinex and Calithera Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calithera Biosciences and Vaccinex 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 Vaccinex are associated (or correlated) with Calithera Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calithera Biosciences has no effect on the direction of Vaccinex i.e., Vaccinex and Calithera Biosciences go up and down completely randomly.

Pair Corralation between Vaccinex and Calithera Biosciences

If you would invest  5.00  in Calithera Biosciences on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Calithera Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Vaccinex  vs.  Calithera Biosciences

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 latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Calithera Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calithera Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Calithera Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vaccinex and Calithera Biosciences

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

The idea behind Vaccinex and Calithera Biosciences 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.