Correlation Between Virax Biolabs and Longeveron LLC

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

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

Diversification Opportunities for Virax Biolabs and Longeveron LLC

0.27

Correlation Coefficient

Virax Biolabs  Longeveron LLC

Modest diversification

The 3 months correlation between Virax and Longeveron is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Virax Biolabs Group and Longeveron LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longeveron LLC and Virax Biolabs 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 Virax Biolabs Group are associated (or correlated) with Longeveron LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longeveron LLC has no effect on the direction of Virax Biolabs i.e., Virax Biolabs and Longeveron LLC go up and down completely randomly.

Pair Corralation between Virax Biolabs and Longeveron LLC

Given the investment horizon of 90 days Virax Biolabs Group is expected to under-perform the Longeveron LLC. In addition to that, Virax Biolabs is 2.45 times more volatile than Longeveron LLC. It trades about -0.1 of its total potential returns per unit of risk. Longeveron LLC is currently generating about 0.02 per unit of volatility. If you would invest  206.00  in Longeveron LLC on September 3, 2024 and sell it today you would lose (1.00) from holding Longeveron LLC or give up 0.49% of portfolio value over 90 days.

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

Virax Biolabs Group  vs.  Longeveron LLC

Virax Biolabs Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virax Biolabs Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Longeveron LLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Longeveron LLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Longeveron LLC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Virax Biolabs and Longeveron LLC

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

The idea behind Virax Biolabs Group and Longeveron LLC 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.