Correlation Between VectivBio Holding and Annexon

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

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

Diversification Opportunities for VectivBio Holding and Annexon

0.33

Correlation Coefficient

VectivBio Holding  Annexon

Weak diversification

The 3 months correlation between VectivBio and Annexon is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VectivBio Holding AG and Annexon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexon and VectivBio Holding 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 VectivBio Holding AG are associated (or correlated) with Annexon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexon has no effect on the direction of VectivBio Holding i.e., VectivBio Holding and Annexon go up and down completely randomly.

Pair Corralation between VectivBio Holding and Annexon

If you would invest  541.00  in Annexon on August 31, 2024 and sell it today you would lose (7.00) from holding Annexon or give up 1.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

VectivBio Holding AG  vs.  Annexon

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.

Annexon

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with VectivBio Holding and Annexon

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

The idea behind VectivBio Holding AG and Annexon 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.